The fate of New England's offshore wind energy: between climate goals and geopolitical ambitions

Energy policy under the administration faces growing opposition in the utility sector. While ministers Dag Burgum and Chris Wray enjoy support from the oil and gas industry, utilities are under pressure due to the sudden halt of a major offshore wind project off the coast of New England states.

Revolution Wind Project: From Triumph to Uncertainty

On August 22, the Bureau of Ocean Energy Management suspended work on the Revolution Wind project developed by Danish company Ørsted. The decision was made without details, citing national security concerns. This dealt a blow to the industry, as the project was approximately 80% complete and in the final stages of development.

The four-billion-dollar project involves installing 65 Siemens Gamesa turbines, each with a capacity of 11 megawatts, in waters off Block Island, Rhode Island. Foundations for all turbines are already installed, with 45 of them in place. The project’s generating capacity is 704 MW, and the energy was to be distributed between Rhode Island and Connecticut, powering about 350,000 homes.

Along with the project suspension, the Department of Transportation canceled multi-million-dollar federal grants for port infrastructure development. The Davisville port in Rhode Island lost $11.25 million in funding, and the Salem wind port project in Massachusetts lost nearly $34 million for the construction of a marine wind energy terminal.

Conflict Between Energy Trajectory and Government Policy

Many American utilities are steadily moving toward an energy transition. Under the Biden administration, they actively invested in wind and solar generation as the costs of renewables became competitive and energy storage technologies advanced. Global trends favor this transition.

Current government policy, prioritizing fossil fuels, creates a serious contradiction. Companies enthusiastically regard natural gas as a transitional fuel but are cold to coal unless it constitutes a significant part of their portfolio. Meanwhile, prioritizing hydrocarbons directly conflicts with the long-term investment plans of utilities.

New England is especially sensitive to these fluctuations. The region already faces a shortage of generating capacity, and long-term electricity demand forecasts require expanding renewable production.

National Security as a Pretext, Geopolitics as the Real Motivation

The official explanation for halting the Revolution Wind project cites national security considerations. Minister Burgum stated in an interview with CNN that offshore wind turbines affect military radar and pose a threat to defense systems. However, the Pentagon has already approved similar projects in 2023. Experts note that standard practice in such cases involves installing special radar adjustments, as is done for tall buildings.

The British newspaper Daily Telegraph offered a different explanation. The project halt could serve as leverage against the Danish government amid the growing interest of the administration in Greenland—the world’s largest island, rich in rare earth metals and energy resources.

The order to suspend significantly impacted Ørsted’s market value. Denmark may increase its stake in the company through a new funding round. This creates new leverage in negotiations over US access to Greenland’s resources and its political status.

Such tactics have been used before. The Empire Wind project off the coast of New York and New Jersey, developed by Norwegian company Equinor, was halted in May. This forced New York Governor Kathy Hochul to agree to a revised schedule for the development of gas pipeline infrastructure to increase regional gas supplies. The pipeline project has not yet been signed, but the White House announced a “surrender” by the state administration, and Williams activated a request for the so-called Northeast Supply Enhancement project.

Uncertainty in the Energy Sector

This practice of holding certain projects hostage to achieve goals in entirely different areas creates instability in the industry. Utilities find themselves in a difficult position: they must consider unpredictable political moves while simultaneously investing billions in the energy transition.

Notably, major trade associations representing the interests of utilities in New England have not issued official statements regarding the suspension of Revolution Wind. However, the absence of a voice does not mean agreement. More likely, it reflects confusion in the face of unpredictable political dynamics.

The energy establishment is setting new priorities, and companies are learning a bitter lesson: the phrase “energy is everything” means that energy can be used as a tool of pressure in geopolitical games if it threatens national interests.