The US Offshore Wind Industry Is Almost Dead, But Not Quite

---

---

The US offshore wind industry was a tough nut to crack long before US President Donald Trump took office earlier this year with a vendetta against “windmills,” and the going is even tougher now that Trump has thrown one monkey wrench after another into the works. Nevertheless, some global stakeholders are willing to play the long game, the latest examples being the familiar diversified UK-based energy firm bp and the somewhat less familiar but also diversified Japanese energy firm JERA

JERA & bp Place A Big Bet On Offshore Wind

Globally, of course, the offshore wind industry is ramping up full speed ahead, which explains why bp and JERA have just hooked up to launch a new 50–50 offshore wind joint venture called JERA Nex bp. UK Trade Envoy to Japan and Member of Parliament Sharon Hodgson calls the new firm “one of the world’s largest offshore wind developers and operators.”

“The new company’s portfolio of operating assets and development projects has a net potential generating capacity of 13GW. This includes around 1GW of installed net generating capacity, a 7.5GW development pipeline and an additional 4.5GW of secured leases,” bp explains.

It remains to be seen how much, if any, of those 13 gigawatts are coming to the US. At first glance, the amount would appear to be zero. One bad sign appeared last month when bp announced the sale of its BP Wind Energy North America branch to the Clearlight Energy branch of LS Power.

Or, maybe that’s not such a bad sign after all. BP Wind Energy North America specialized in the onshore wind business, so the sale doesn’t necessarily mean bp is also giving up on the US offshore wind industry. As of this writing, bp is still holding onto its offshore leases for the Beacon Wind 1 and 2 offshore projects, located between Cape Cod, Massachusetts, and Long Island, New York.

“Beacon Wind 1 and 2 have the combined potential to deliver renewable energy to over 2 million consumers in the northeastern US,” bp notes, by way of indicating the size of the US offshore wind market.

What’s Going To Happen To Beacon Wind 1 & 2?

And here’s where it gets interesting. In January of 2024, a full 12 months before Trump kicked practically the entire US offshore wind industry to the curb, bp relieved itself of a 50% share in the Empire Wind offshore project, located southeast of Long Island, leaving the Empire project for the Norwegian firm Equinor to build. In a press statement announcing the decision, bp also asserted that it would “independently pursue future US offshore wind opportunities.”

If the Empire Wind project is ringing some bells, it should. By April of this year, construction was already underway on Empire Wind when the Trump administration summarily issued a stop-work order. After some prompting by New York Governor Kathy Hochul and the allure of a new gas pipeline that may or may not materialize, the stop-work order magically evaporated. Empire Wind is back on track and on schedule.

Does bp regret shedding Empire Wind now? Maybe, maybe not. The company canceled a transmission application for the Beacon Wind projects in February, but that was not a sign of giving up on the US offshore wind industry. As explained by the news organization 4C Offshore, the application was filed in 2022 with New York State based on a previous policy regarding grid connections. State officials later indicated that a new “generation-only” format for offshore solicitations was in the works, relieving offshore developers from grid connection responsibilities.

So, there sit Beacon Wind 1 (1.23 gigawatts) and Beacon Wind 2 (1.2 gigawatts) with all their multiples of clean kilowatts waiting to be tapped by energy-sucking coastal communities. It may take a few more years — say, just a hair under 3.5 years — but that’s just a blip on the screen for global energy firms like bp and JERA, which have the time and the money to sit on their assets until both market and policy conditions are favorable.

A Faint Glimmer Of Life For The US Offshore Wind Industry

Notably, when the Empire Wind stop-work order came down in April, Equinor interpreted that as a safety measure applicable to its offshore wind site. In the meantime, though, Equinor kept moving full speed ahead with the construction of its massive new offshore support hub, located on the Brooklyn waterfront.

That’s a signal of support for the future of the US offshore wind industry broadly, regardless of the stop-work order on a single project. With that in mind, let’s take a closer look at JERA Nex bp. On a long term basis, it seems unlikely that the new venture would pass on an opportunity to wriggle its way into the US offshore market, taking advantage of holes left by other offshore stakeholders that have given up the ghost.

JERA Nex bp will “initially focus on disciplined and prioritized development of projects from its existing global pipeline,” bp explains, in addition to operating existing offshore projects in Europe and Asia. By prioritized development, it’s a fair guess they mean the Beacon projects will go to the back of the line. If you have another guess, drop a note in the comment thread.

In a press statement, newly minted JERA Nex bp CEO Nathalie Oosterlinck emphasized that “JERA Nex bp begins life with a strong operating portfolio and an extensive development pipeline,” which could also indicate that the venture is not about to give up on the Beacon projects without a fight.

JERA Nex CEO Satoshi Yajima also indicated a long-term perspective on offshore wind energy (JERA Nex is a JERA subsidiary).

“Our partnership with bp has accelerated the growth trajectory of JERA’s overall renewable energy strategy, and the completion of the JV formation reflects the strength and agility that will position JERA Nex bp for long-term success,” Yajima stated.

Meanwhile, Over In The USA

While the US flounders in the witheringly stupid swamp of “American Energy Dominance,” the rest of the world is moving on.

Though decarbonization advocates note that the new joint venture enables both bp and JERA to insulate their fossil fuel interests, renewables can also cut in from the other side. JERA, for one, anticipates that renewables will help support the decarbonization of its booming green hydrogen and ammonia business.

The green hydrogen and ammonia game is also afoot in the US, where — oopsies! Never mind. Although some projects are moving forward, Trump and his Republican allies in Congress also yanked the rug out from under that industry.

Image (cropped): The US offshore wind industry is on life support for now, but some global energy firms are still keeping the lights on (Beacon Wind offshore wind site map courtesy of BOEM).