Cancelled Culture: Abandoned and Delayed Offshore Wind Projects Now Account for 300 GW

Western markets continue to suffer from a lack of positive signals in the short- term relying heavily on the success of upcoming auction rounds as they strive for net-zero targets, while China market creates a stable platform for investment says MSI. Total project cancellations, suspensions and delays in the offshore wind market have hit 300 GW as a combination of politics and economics take their toll on planned installations in the US and Europe according to new data published by Maritime Strategies International.

The US suffers from a vulnerable local supply chain but most damage to the industry will be done by the Presidential Executive Order to temporarily withdraw all offshore wind leasing within the Offshore Continental Shelf which will stop new offshore wind project development off the US coast.

To make matters worse for developers, projects that had already been awarded under the Biden administration are under scrutiny and threat of cancellation, such as the 1.5 GW Atlantic Shores project.

“Unfortunately for the US this is not a one-off with several wind farm developers re-evaluating or abandoning plans due to uncertainty around government support under the Trump administration,” said MSI Associate Director Todd Jensen. “This uncertainty will further undermine confidence of both wind farm developers and investors and looks set to remain whilst Trump is in office.”

High profile wind farm cancellations and delays have become a regular headline within the offshore wind industry. The latest coming from the US and Shell’s 1.5 GW Atlantic Shores project which was cancelled in June due to having its Air Permit revoked pending review, which pushed Shell to abandon the project.

In April Equinor also experienced difficulties in the US with its Empire Wind project being issued a stop-work order by the US Department of Interior. The order was later lifted in May, but such situations have seen some developers lose confidence in the US as a consequence.

All regions have been affected by cancellations and suspensions with 300 GW worth of projects having been cancelled, delayed or suspended, however, some of these have since been, or are due to be, re-evaluated and auctioned off in later rounds.

Europe accounts for 60% of cancelled or suspended capacity. In this case, Jensen points to the more advanced nature of Europe's offshore wind industry compared to other regions. “European governments and developers have learned harsh lessons from legislation, auction round strike pricing, cost inflation and supply chain constraints,” he adds.

Meanwhile China, as the world leader in offshore wind with over 40 GW of installed capacity, continues to show strong incentive for further growth with its government announcing it will be switching to new energy electricity prices based off market forces rather than government-set pricing. A benchmark will also be set and if prices vary too far from this level, settlements will be implemented to cover the gap, increasing stability and reducing risk for new investors.

Maritime Strategies International | https://www.msiltd.com/