Trump fears overshadow US offshore wind gathering

Good morning, and welcome back to Energy Source, coming to you from Atlantic City, New Jersey, where thousands of offshore wind executives gathered this week to discuss the future of the industry.

A potential Donald Trump victory next week damped the mood of the annual gathering, hosted by the American Clean Power Association. The former president has vowed on the campaign trail to end the industry on “day one”. More on what’s at stake for the industry below.

Offshore wind is nowhere near a deciding factor for voters in this election. If Trump wins a second term next week, popular discontent about the cost of living will be a major reason. The cost of petrol — politically potent, given its visibility on every highway — has averaged $3.48 a gallon this year, 30 per cent higher than its average in 2019, though it has fallen recently.

The FT has a deep dive this morning into Volkswagen’s descent into crisis. Europe’s largest carmaker has become the symbol of the continent’s fight for industrial relevance and is now at war with workers and politicians as it tries to navigate a painful electric vehicle transition.

Thanks for reading,

Amanda

US offshore wind industry grapples with election uncertainty

Thousands of US offshore wind leaders convened in the east coast’s gambling mecca this week for one last hurrah ahead of the upcoming presidential election, where a potential Donald Trump victory could all but bring the sector to a standstill.

Fears of such an outcome were palpable. Throughout the Atlantic City convention hall, his name peppered conversations, and several attendees expressed to Energy Source concerns that a Trump presidency would reverse progress for the nascent industry.

“Everything depends on next Tuesday. A Harris-Walz win, next Tuesday is good news for the offshore wind industry. A Trump-Vance win, next Tuesday is terrible,” said Sean McGarvey, president of the North America’s Building Trades Unions, which works on offshore wind projects, on a panel. McGarvey’s predictions that Kamala Harris would win the election were met with unanimous applause.

Joe Biden’s administration turbocharged US offshore wind deployment, approving the first large-scale offshore wind project and setting a target to deploy 30GW of offshore wind by 2030. Unlike other renewable sources such as solar and onshore wind, offshore wind requires federal approvals and is more vulnerable to changes from whoever may be in office.

Michael Brown, head of developer Ocean Winds North America, told Energy Source, “the outcome of this election will be material on the industry”.

“Whether we can permit all of our projects or not will be dependent upon the administration,” said Brown.

Ocean Winds, a joint venture between Engie and EDPR, has three offshore wind projects leased in the east coast but they have not received federal approvals.

Trump is a fierce opponent of offshore wind. At a May rally just 45 minutes from this week’s conference, the former president vowed to stop offshore wind projects on “day one” if reelected. Republican support for offshore wind in New Jersey has plummeted in recent years from 69 per cent in 2019 to 28 per cent as of August 2023, according to a Monmouth University poll last year.

“[Trump’s] an incredible businessman. He loves his country . . . There’s no doubt in my mind he will be elected,” said Kathleen DiFabio, a member of Save the East Coast, an opposition group protesting outside the convention centre, calling attendees passing by “whale killers” and the industry a “green scam” while sitting in beach chairs.

Election uncertainty is the latest setback to the offshore wind sector that’s been through a painful reset over the past year as developers cancelled project commitments because of inflation and high interest rates, pushing the federal government’s 30GW target likely beyond reach.

The Biden administration on Tuesday held its final offshore wind auction for development rights in the Gulf of Maine, attracting bids for only half of the eight offered leases in a sign of a lack of investor confidence in the sector.

“There’s a lot at stake,” Amardeep Dhanju, a senior managing consultant at consultancy Ramboll and former analyst at the Bureau of Ocean Energy Management, told me over a seafood lunch. “[During Trump’s first term], we did see a slowdown.”

The first US offshore wind project was a 30MW wind farm approved under Barack Obama’s administration off the coast of Rhode Island. While the Trump administration approved one 12MW pilot project off the coast of Virginia, permits for gigawatt-scale projects were delayed and not approved until the Biden administration.

“You’ve got to take him seriously. If the president of the United States wants to stop something from happening, he or she has a decent shot at doing it,” said Tim Sullivan, head of New Jersey’s Economic Development Authority.

Earlier this year, Maura Healey, the Democratic governor of Massachusetts, told Energy Source in an interview that a Trump victory would be “devastating” for the sector.

The case for optimism

Analysts and legal experts warn Trump could pause permits for offshore wind projects, similar to the Biden administration’s freeze on new liquefied natural gas terminals. Judicial challenges to environmental reviews could also provide an avenue for him to cancel already approved projects.

However, John Northington Jr, a government affairs adviser at K&L Gates, cautioned the Biden administration has established a foundation for offshore wind through lease sales and federal approvals that would be difficult to claw back entirely. “I don’t think that the sky is falling,” he said.

Not all Republicans are against offshore wind. Coastal Virginia Offshore Wind, the largest project in the country, has the firm backing of the state’s Republican governor Glenn Youngkin.

“It really comes back down to jobs and what’s best for the customers,” said Joshua Bennett, vice-president of offshore wind at Dominion Energy, the developer of the Virginia project.

State and industry leaders also warned a loss of offshore wind could exacerbate the power shortfalls projected from growing electricity demand from data centres, new manufacturing and electrification.

Jason Grumet, chief executive of American Clean Power Association, told Energy Source: “As people get more and more serious about looking at what the energy demands of the country are, there’s more confidence that this industry is going to have to be a big part of that solution.”

Nationwide, consultancy ICF estimates US electricity consumption will increase 9 per cent by 2028, up from less than 1 per cent annual growth for most years since 2010. Dominion Energy, which serves Virginia, home of the highest concentration of power-hungry data centres, expects power demand in its service region to grow 5.5 per cent annually over the next decade, the largest growth since the second world war.

“Unfortunately, we don’t have the luxury to say ‘No, don’t build that.’ We have to make investments to keep up with demand,” Evan Vaughan, executive director of the Mid-Atlantic Renewable Energy Coalition Action, told me in the hallways of Bally’s Casino.

“This is really our best shot, especially in a state like New Jersey, which doesn’t have strong fossil fuel resources, to deploy a lot of American energy and reduce our dependence on foreign imports of energy sources,” Vaughan said.

Job moves

• Ionic Mineral Technologies, a battery materials start-up, appointed Sunho Kang as chief technology officer. Kang most recently served as CTO at Ola Electric, an Indian electric mobility company.

• René Umlauft is joining Green Hydrogen Systems as chief executive, succeeding Peter Friis, who is leaving the Danish electrolyser maker. Umlauft comes from German manufacturer Rittal.

• Maxeon Solar Technologies has chosen Dimitri Hu to be its next chief financial officer. Ken Olson, the interim CFO, will serve as his deputy. Hu joins from TCL Industries.

• Rob Morgan, chief executive of Canadian oil and gas producer Strathcona, is retiring. He will also step down from the board of directors and be replaced by David Roosth, managing director of Waterous Energy Fund.

• Theodore Paradise is joining advanced conductor manufacturer CTC Global as chief policy and grid strategy officer. Paradise joins from K&L Gates, where he was a partner on energy policy matters.

Power Points

• Ukraine and Russia are in preliminary talks to halt strikes on each other’s energy infrastructure. An agreement would mark the most significant de-escalation of the war since Russian leader Vladimir Putin ordered the full-scale invasion of Ukraine in early 2022.

• The west will struggle to break its reliance on Russian nuclear fuel without bigger incentives for alternative suppliers, warns Orano, the second-largest western supplier of enriched uranium.

• Volvo Cars wants to buy struggling Northvolt out of their joint venture to build a battery factory in Sweden as the expensive shift to electric vehicles and the rise of lower-cost Chinese competitors roil the European car industry.

Energy Source is written and edited by Jamie Smyth, Myles McCormick, Amanda Chu, Tom Wilson and Malcolm Moore, with support from the FT’s global team of reporters. Reach us at energy.source@ft.com and follow us on X at @FTEnergy. Catch up on past editions of the newsletter here.