According to the Associated Press, the U.S. Department of Transportation cut $679 million in federal funding for 12 offshore wind projects last Friday, the latest blow to the U.S. offshore wind industry from the Trump administration. The department said the canceled funds will be reallocated, potentially to upgrade ports and other infrastructure. Several wind power projects have been halted in the United States in recent months. Experts warn that this move, which emphasizes the importance of clean energy in combating climate change, will trigger changes in the U.S. energy mix and weaken its competitiveness in the clean energy sector, impacting related industries such as shipping and steel. It could also hinder the development of industries such as artificial intelligence and data centers due to insufficient power supply.
Wind power has become a source of electricity in many regions.
On August 22, US federal agencies ordered Denmark’s Ørsted Energy to immediately halt all construction activities on a large-scale offshore wind project in the United States, citing the need to assess the project’s impact on US national security and the oceans. The project, located off Rhode Island, has a total investment of approximately $1.5 billion and is scheduled to be operational by the end of 2026, expected to power approximately 350,000 homes. Reuters reported that the project has reached 80% construction progress. On August 6, the Trump administration announced the cancellation of the Lava Ridge wind project, approved at the end of Biden’s term, citing “significant legal flaws” and violations of multiple statutory review procedures. In April of this year, the US government also temporarily halted a large-scale wind project by Norway’s Statoil in New York State.
The New York Times reported that Trump has been a vocal opponent of wind power for years. On his first day in office in January, he issued a decree suspending federal approvals for new offshore wind projects. Public reports also indicate that Trump advocates for a return to a US energy policy focused on fossil fuels. The Associated Press stated that Trump, vowing to restore America’s “energy dominance” in the global market, is pushing for a greater reliance on fossil fuels like coal, oil, and natural gas, which emit greenhouse gases that contribute to global warming.
Reuters data shows that between January and July of this year, fossil fuel-generated electricity accounted for an average of 56% of total US utility electricity generation, while clean energy sources such as wind and solar power accounted for 44% during the same period. According to data released by the New York Times, wind power currently accounts for over 10% of the US electricity supply and has become a primary source of electricity in states like Iowa, Oklahoma, and Texas.
The energy mix may be changing.
“The Trump administration’s unusual actions have created a crisis in the wind power industry, putting numerous jobs and massive investments at risk.” According to the New York Times, the Biden administration sought to support the emerging offshore wind industry as part of its climate change strategy, setting a goal in 2021: to reach 30,000 megawatts of installed offshore wind capacity by 2030, enough to power approximately 10 million households. However, in the years since, many planned offshore wind projects have stalled due to supply chain delays and surging local opposition. Since Trump took office this year, the federal government’s hostility toward the wind power industry and uncertainty surrounding tariffs have forced more projects to be suspended, with some wind power companies announcing that they will suspend investment in the United States for the foreseeable future.
The Hill newspaper, citing experts, warned that the United States’ retreat from clean energy would not only lead to higher costs for consumers and slow innovation but would ultimately undermine its competitiveness in key industries. These concerns are exacerbated by forecasts of soaring energy usage and prices in the coming years.
Since returning to the White House, Trump has been committed to increasing the production and export of fossil fuels like liquefied natural gas and promoting nuclear power to expand the energy supply. However, Jonathan Elkind, a senior fellow at Columbia University’s Center on Global Energy Policy, believes that without the development of renewable energy, Trump’s efforts to unleash America’s energy potential are incomplete. “The future will be a world of rapid change in energy technology. The key question is what role the United States will secure for itself—innovator, market creator, market leader, solution provider, or laggard?”
Energy security experts warn that a reduced diversity in the US energy mix will have widespread consequences. A July report by the US Energy Security Leadership Council and the energy security think tank SAFE stated that a diversified domestic energy industry would reduce the US’s dependence on foreign oil and other energy sources. The report concluded that “transitioning to new technologies” is “critical” to national security, as “dependence on volatile and manipulated oil markets constrains US foreign policymaking.” The report noted that, unlike fossil fuels, renewable energy sources do not require fuel inputs and are therefore less susceptible to price fluctuations. The American Petroleum Institute believes that clean energy should complement the liquefied natural gas (LNG) that Trump has emphasized.
Impacting electricity prices and impacting key industries like AI
In addition to impacting the US energy landscape, The Hill believes the wind power crisis will also jeopardize US competitiveness across various sectors. Wayne Gray, an economics professor at Clark University, stated that the Trump administration’s policies have weakened the incentive for US companies to develop new clean energy products. Elkind stated that the cancellation of offshore wind power projects will also impact other key industries like shipping and steel.
Meanwhile, rising electricity prices will also impact consumers. The Hill stated that electricity consumption is expected to surge and reach record highs in the coming years. According to the US Clean Energy Association, US electricity demand is projected to grow by 35% to 50% by 2040.
According to the latest news reports, average electricity prices in the United States rose 5.5% by the end of July compared to the same period last year. One reason for this increase is the expansion of energy-intensive industries like data centers and artificial intelligence, in which the Trump administration has invested heavily. Avery Ash, senior vice president of the energy security think tank SAFE, said, “We predict that electricity demand will grow, and the only viable solution currently is to develop renewable energy sources like wind and solar, which are rapidly deploying and already awaiting interconnection.”
Democrats have also recently strongly criticized the Trump administration’s rollback of renewable energy policies, blaming Trump for high energy prices. A group of senators wrote in a joint letter, “At a time when energy demand is surging, your policies are stifling America’s lowest-cost and fastest-deployed energy sources—solar and wind—by raising costs, creating insurmountable approval barriers, and injecting uncertainty into the market.” Rachel Fox, president of the American Petroleum Institute, disagreed. While acknowledging that energy demand is growing and prices are rising, she believes that natural gas “is most likely to meet the energy needs the United States will face over the next decade.”
Despite these policies, some American companies are increasing their investments in the emerging renewable energy market. For example, after the US government eliminated its electric vehicle tax credit, Ford Motor Company plans to invest nearly $2 billion to develop more affordable mid-size electric vehicles. However, Avery Ash expressed concern that even if the private sector continues to invest in clean energy technologies, industries like artificial intelligence and electric vehicles will continue to face obstacles if the electricity supply cannot keep up with demand. “The real question is not how we meet the electricity needs of today, but how we meet the energy needs of tomorrow,” Elkind added that a reduced emphasis on renewable energy would make it difficult for US hyperscale companies (such as tech giants) to develop AI and other data centers domestically, make it harder to avoid higher electricity costs for households, and hinder the development of emerging manufacturing industries across the country.
Liang Huaixin, a researcher at the Institute of National Security and Governance at the University of International Business and Economics, told the Global Times that the continuous development of new technologies such as AI, large-scale intelligent computing, and data storage requires a massive electricity supply. However, the US government’s crackdown on green wind power will have an impact on the overall power supply in the United States, and in turn affect the development of related industries such as AI.
