US Offshore Wind Stall

By 2024, the United States had cancelled or renegotiated contracts representing more than 12 GW of planned offshore wind capacity, projects that had already survived years of permitting and environmental review.

The collapse of US offshore wind targets after 2022 reveals a paradox: the technology works, the wind resource exists, and federal policy was supportive, yet the industry stalled anyway. The contracts signed in the low-interest-rate environment of 2019-2021 became economically unviable when inflation and rising interest rates arrived simultaneously with supply chain disruptions. A project locked into a fixed power purchase agreement at $80/MWh cannot survive when its financing costs double and turbine prices rise 30-40%.

But the interest rate shock exposed deeper structural problems. The US has no Jones Act-compliant installation vessels (the Jones Act requires US-flagged ships for cargo between US ports, and specialized offshore wind installation ships are all foreign-flagged). Port infrastructure capable of staging and assembling the largest turbines barely exists. The domestic supply chain for towers, blades, and foundations is thin. And federal permitting for offshore wind can take 5-7 years from application to construction start, meaning developers must forecast economics nearly a decade out.

Europe built its offshore industry over 30 years with policy continuity, dedicated ports, and integrated supply chains. The US attempted to compress that into a decade.

Avangrid's Commonwealth Wind project off Massachusetts illustrates the bind. The project won a contract in 2021 at roughly $72/MWh. By 2023, the developer estimated the actual project cost had risen enough that it needed a contract price above $100/MWh to remain viable. Massachusetts regulators initially refused to renegotiate.

If the state needs offshore wind to meet its climate targets, why wouldn't regulators agree to a higher price?

Higher prices get passed to ratepayers, and state regulators face political pressure to keep electricity bills down. The result: Avangrid cancelled the contract in late 2023 and reapplied in a new procurement round. The turbines weren't built. The target year got pushed further out.

The stall is a case study in how policy targets and market realities diverge when the underlying industrial infrastructure isn't in place, a pattern that appears across clean energy technologies whenever deployment timelines outrun supply chains.