Offshore wind is likely to miss the Biden administration’s 2030 target for the industry despite receiving billions of dollars of subsidies, according to a Tuesday American Clean Power Association (ACP) report.
The administration has a stated goal of having the offshore wind industry provide 30 gigawatts (GW) of power by 2030, but the ACP report projects that capacity will only reach about 14 GW by then. The Biden administration has subsidized the industry to the tune of billions of dollars since assuming office in 2021, but those efforts appear unlikely to put the 2030 target in reach until at least 2033, per ACP’s analysis.
“Market analysts forecast that there will be 14 GW of offshore wind deployed by 2030, 30 GW by 2033, and 40 GW online by 2035,” ACP said in a press release accompanying the report’s publication. “These outlooks build on the 7.6 GW of offshore wind projects seeking to be operational by the end of 2027.” (RELATED: Biden Admin Releases Robust Leasing Schedule For Struggling Green Industry After Issuing Restrictive Oil And Gas Plan)
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The offshore wind industry received a major boost from the Inflation Reduction Act (IRA) — President Joe Biden’s signature climate legislation — before struggling in a macroeconomic environment marked by inflation and higher interest rates. Offshore wind’s critics have claimed that the industry’s struggles fundamentally result from the fact that the industry would be completely incapable of standing up on its own in the absence of government support.
Last year was especially rough for the industry, as major developers like Ørsted walked away from major developments altogether or sought to renegotiate deals with states and utility regulators to pad margins that had been eroded by inflation and high borrowing costs. Other projects have been cancelled or otherwise thrown off schedule so far in 2024 as well.
Other difficulties that developers have encountered include supply chain backups and logistical issues, both of which have contributed to the cost increases plaguing the industry.
Nevertheless, ACP remains bullish on the industry’s potential in the U.S. market in the coming years.
“Offshore wind project development, construction, and operations are expected to support up to 56,000 jobs by 2030, with the industry set up to invest $65 billion,” ACP states in the overview. “The new report also highlights the economic impact of offshore wind on domestic U.S. shipbuilding, port infrastructure, and other supply chain activities. There are more than 40 new vessels currently on order or under construction to support the industry. The industry committed a record $3 billion of supply chain investment in 2023 alone, with total infrastructure investment announcements now exceeding $9 billion.”
The White House did not respond immediately to a request for comment.
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