Offshore Headwinds

Wind turbines generate electricity at the Block Island Wind Farm on July 7, 2022, near Block Island, Rhode Island. (Photo by John Moore/Getty Images)

As honchos from around the world meet in Dubai for the 28th United Nations Climate Change Conference (COP28) this week, it’s become increasingly clear that the much-ballyhooed “green transition” in the United States—fueled at least in part by big subsidies—has hit an equally big speed bump. “A year after President Joe Biden’s landmark climate law promised billions of dollars for America’s switch to clean energy,” Bloomberg reported last week, “some of the nation’s most ambitious renewable power projects have been shelved, electric car sales are missing targets and investors are fleeing the sector in droves.” Clean energy stocks that many thought the Inflation Reduction Act would boost have instead seen a “$30 billion collapse in the last six months,” and many analysts are significantly downgrading their emission reduction projections. As one energy consultant put it, “the euphoria has worn off and we’re starting to realize it’s still not going to be easy,” because—as another noted in the same piece—“economic realities” have set in.

While much of the clean energy sector in the United States is hurting, probably the biggest pains are being felt in offshore wind. Projects are getting delayed or canceled, companies are under serious financial pressure, lawsuits are blossoming, prices are increasing, and climate ambitions are doing just the opposite. Big Wind isn’t dead, but it’s definitely been taken down a notch or three.

In some ways, these and related problems are just your typical pandemic-era problems and nascent industry growing pains. In many other ways, however, the problems facing offshore wind in the United States have been caused or exacerbated by government policies—serving as yet another reminder of what happens when industrial policy dreams meet not economic realities, but government ones.

You can’t say you weren’t warned.

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