While offshore wind developers are canceling projects in the Northeast due to cost increases and inflationary burdens, President Biden approved the biggest offshore wind farm yet off the coast of Virginia. Biden’s Interior Department approved a plan to install up to 176 giant wind turbines (2.6 gigawatts) off the coast of Virginia, which is proposed to be the nation’s largest offshore wind farm. Currently, the United States has only 2 operating offshore wind farms: a 30 megawatt one off Block Island, Rhode Island and a smaller demonstration one off the coast of Virginia with two turbines.

The Coastal Virginia Offshore Wind project, to be built by Dominion Energy, is the fifth commercial-scale offshore wind project approved by the Biden administration. It would be about 87 times larger in capacity than the largest currently off Block Island. But, many offshore wind projects have fallen to the wayside with the most recent being the cancellation of two wind farms off the coast of New Jersey. Orsted, a Denmark-based offshore wind company, cancelled its Ocean Wind 1 and 2 projects due to mounting financial problems for the company and for the offshore wind industry.

The Biden administration wants to install 30 gigawatts of offshore wind power in the United States by 2030, equal to 1,000 Block Island projects. But, offshore wind developers have struggled with soaring costs, rising interest rates, supply chain delays and local opposition. It is now expected that just 16.4 gigawatts of offshore wind capacity will be completed by 2030, about half the Biden administration’s goal.

The Coastal Virginia Offshore Wind Project

Dominion Energy recently received eight massive steel foundation posts from Germany in preparation for its $9.8 billion coastal wind project, which will be located about 27 miles off Virginia Beach. Construction is expected to be completed by 2026. The Biden administration’s environmental review found that the Virginia offshore wind project had the potential to disrupt local fishing areas, wetlands and whale migration routes. As part of the approval process, Dominion agreed to relocate several turbines away from known fish areas, and to compensate local fisheries for any losses they might suffer.

Offshore Wind Project Cancellations

In Massachusetts, the company behind the Commonwealth Wind project, Avangrid, terminated its contracts with state utilities this year, citing inflation, and will rebid at higher prices. Avangrid will pay $48 million in penalties for the termination to National Grid ($21.6 million), Eversource ($25.9 million), and Unitil ($480,000). Massachusetts regulators also approved the termination of power purchase agreements (PPAs) tied to the 1,200-megawatt SouthCoast Wind project, an offshore development by Shell New Energies and Ocean Winds North America. SouthCoast Wind agreed to pay more than $60 million to be released from the contracts.

In Connecticut, Avangrid filed settlements with utilities Eversource Energy and United Illuminating to cancel its power purchase agreements (PPAs) for the 804-megawatt Park City Wind project. In New York, the developers of four proposed offshore wind farms recently asked the state for more money that New York rejected. It is unclear if the projects will move ahead. More recently, Orsted cancelled New Jersey’s Ocean Wind 1 and 2, citing high inflation, rising interest rates, and supply chain bottlenecks impacting long-term capital investments. The nameplate output capacity of the two cancelled projects amounts to more than 6 percent of the 2030 target set by the Biden administration.

Rhode Island Energy announced that it would not move forward with an offshore wind PPA with Ørsted and Eversource for the 884-megawatt Revolution Wind 2, calling it “too expensive.” Orsted announced that it is taking a final investment decision on its Revolution Wind project off the Rhode Island coast, a development which the Bureau of Ocean Energy Management approved in August. Orsted’s struggles became apparent in late August, when the company announced that it was marking down the expected value of some of its projects by more than $2 billion due to the issues that ultimately forced it to cancel the Ocean Wind projects.

Despite project costs rising steeply due to supply chain challenges, inflation and high interest rates characterized as “Bidenomics,” some offshore wind projects are inching along. Off the coast of Martha’s Vineyard in Massachusetts, construction is underway on Vineyard Wind, where 62 wind turbines are expected to be installed this year.  Fishing groups and landowners, however, have filed several lawsuits to halt the Vineyard Wind project, arguing that the federal government did not properly study the consequences the wind farm might have on fisheries or the endangered North American right whale. From December to June, at least 39 whales and 37 dolphins have been found stranded on East Coast beaches near where energy developers have been conducting offshore wind surveys. Coastal city mayors have asked for a moratorium on activities relating to offshore wind until it can be determined if the operations are responsible for the deaths.

Offshore Wind Is Expensive

According to the Energy Information Administration, offshore wind is one of the most expensive electric generating technologies in the slate of future generating technologies that the agency considers. Its generating costs are more than double that of a natural gas combined cycle plant and over 3 times as much as an onshore wind plant. With its costs so high, it is a wonder that the Atlantic Coast states want to push the higher electric power costs of offshore wind development onto their homeowners and commercial and industrial facilities.


The U.S. offshore wind industry has been struggling due to inflation, supply chain backups, higher interest rates and logistical problems, and some energy industry experts indicated that the industry could soon need a bailout package in order to stay afloat despite massive subsidies they already receive.  A bailout package makes no sense with the high costs of offshore wind power as electricity rates in the United States have already increased over 20 percent for residential homeowners since Biden became President. None the less, President Biden’s Interior Department approved a massive wind farm off the coast of Virginia and has set a high goal of 30 gigawatts of offshore wind capacity by 2030 as part of his climate agenda.

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