For most of the past five years, US offshore wind was described in terms of targets. States along the Atlantic coast set goals measured in gigawatts, and the federal government set a national ambition of 30 GW by 2030. The Energy Information Administration's latest look at the project pipeline describes something smaller and more concrete. Of the 7,200 megawatts of offshore capacity reported in its May generator inventory, projects totaling about 2,400 MW have been canceled since last December, and the remaining 4,800 MW is spread across projects at very different stages.
That is a sharp reset. It is also, in our view, a healthier starting point than the targets it replaces. What survives is the part of the industry that can be financed at today's costs. The question now is whether the contracts states are reissuing are priced to let it be built.
What was lost
The largest single cancellation came in late 2023, when Orsted abandoned the 2,400 MW Ocean Wind 1 and 2 projects off New Jersey. The developer cited rising interest rates, high inflation and supply chain delays. In January 2024, Orsted also withdrew from commitments to the Maryland Public Service Commission to build the Skipjack 1 and 2 projects, totaling 966 MW, although it continues with development and permitting. Late last year, the 20 MW Icebreaker project on Lake Erie was halted amid rising costs and a loss of funding.
These are not engineering failures. They are contract failures. The projects were bid into state solicitations in 2019 to 2021 at prices that assumed low interest rates and stable equipment costs. When both moved sharply against developers, the fixed-price contracts no longer covered the cost of building. Developers asked to renegotiate, states mostly declined, and the projects were canceled.
What remains
The surviving pipeline is real but thin. The 130 MW South Fork Wind project, 12 turbines off Long Island, began generating in March and is awaiting commercial operation. The 800 MW Vineyard Wind 1 off Martha's Vineyard is under construction: as of February, 10 of its 62 turbines were in place, and the project is expected on line by the fall.
Behind them are two projects that have started foundation work. Orsted and Eversource began installing monopiles this spring at the 704 MW Revolution Wind off Rhode Island, and in May Dominion Energy installed the first monopile at the 1,265 MW Coastal Virginia Offshore Wind Commercial Project. Both still appear in the EIA data as pending regulatory approval, because developers have discretion over when to report a project as under construction. On the federal side, the Virginia project is well advanced: the Bureau of Ocean Energy Management and the National Marine Fisheries Service signed a joint Record of Decision in October 2023 approving up to 176 turbines and three offshore substations, and BOEM approved the construction and operations plan on 28 January 2024. BOEM describes the approved project as about 2,600 MW, larger than the figure currently reported in the EIA inventory.
Further back are projects re-awarded through new state solicitations. New York conditionally awarded two projects on 29 February from its fourth solicitation, both of which had first won contracts in its 2019 round: the 924 MW Sunrise Wind, which Orsted and Eversource expect on line in 2026, and the 810 MW Empire Wind 1, which Equinor has not yet reported to the EIA as planned. The state says the pair will be the largest generation projects built in New York in more than 35 years, and counts them toward its goal of 9,000 MW of offshore wind by 2035.
Why the Virginia project is different
Coastal Virginia Offshore Wind stands apart in one respect. It is being built by a regulated utility and recovered through the utility's rate base, rather than sold under a fixed-price contract by an independent developer. That changes who bears cost risk. When costs rose, Dominion could seek approval to pass them through, subject to state regulatory review, rather than face the choice between losing money and walking away.
That model has its own problems. Ratepayers carry the cost risk, and a utility building a large project has less incentive to keep costs down than a developer bidding against rivals. But it explains why the largest single project now advancing in US waters is a utility project, and it suggests that states which want offshore wind to be built may need to accept more cost-sharing than their early solicitations allowed.
The rebid problem
States that lost projects are now rebidding. New York's February awards were a rebid of sorts, offering new contracts to projects that had sought higher prices under their original agreements. New Jersey and others are running new solicitations.
The key design question is how much risk to leave with the developer. The original contracts were fixed nominal prices over 20 years or more. A developer that bid in 2020 had no protection against the inflation of 2021 to 2023. Newer solicitations have begun to include inflation adjustment for part of the price, indexed to measures of steel and general inflation. That makes the contracts more expensive in expectation, but it makes them more likely to be built.
There is no free lunch here. A state can sign a cheap contract that will probably be canceled, or a more expensive one that will probably be delivered. The early solicitations chose the first option without realizing it.
What this means for the 2030 goal
The national 30 GW target was always ambitious. With about 4.8 GW of active projects in the EIA's count and only one project under construction in a formal sense, it is now out of reach on any realistic schedule. That should not be read as the end of the industry. It should be read as the end of a phase in which ambitions were set faster than supply chains, ports, vessels and contracts could follow.
The binding constraints on the next phase are well known. The United States has few installation vessels that can operate under the Jones Act, limited port capacity configured for large turbine components, and a domestic supply chain for foundations and cables that is still being built. Each of those takes years to develop, and each depends on a steady flow of projects to justify investment.
A smaller, better-founded industry
What remains after the cancellations is an industry rebuilt around a small number of projects that have contracts, financing and construction schedules. Its growth over the next five years will depend less on federal targets than on whether state contracts are priced to cover real costs and whether the first large projects are delivered on time and on budget.
If Vineyard Wind 1 and Coastal Virginia Offshore Wind are completed broadly as planned, they will do more for the industry's credibility than any target. If they run into serious cost or schedule problems, the reset of 2023 and 2024 may not be the last.