Offshore Wind: A US Post-Mortem

The Body on the Table

Offshore wind was supposed to be a pillar of American decarbonisation: vast, steady wind close to the dense coastal cities that consume the most power. On paper, it was one of the strongest cases in the whole energy transition. In practice, it became the sector’s most instructive failure — a cautionary tale about what happens when a capital-intensive industry is scaled too fast, on the wrong contracts, in a hostile policy environment.

This piece is deliberately placed in the Build thread as its counterweight. Not everything gets built. Understanding why a well-funded, technically-proven, strongly-supported industry stalled is worth more than another success story — because the failure modes here (contract structure, supply chain, political risk) recur everywhere else in infrastructure. There were two distinct causes of death, and they arrived in sequence.

Cause of Death I: The Economic Heart Attack (2023–24)

The first collapse was purely financial, and it struck the whole Atlantic industry at once. Developers had signed long, fixed-price offtake contracts in the low-rate years around 2019–2021 — committing to deliver power at a set price years before building anything. Then inflation and interest rates spiked together. Offshore wind is about as capital-intensive and long-lead as infrastructure gets — turbines, foundations, ports, specialised vessels, all paid upfront — so a jump in financing costs and equipment prices hit it harder than almost any other asset. The contracts, fixed in a cheaper world, could no longer be delivered profitably.

The cancellations followed fast. In late 2023 Ørsted scrapped the 2,400 MW Ocean Wind 1 and 2 projects off New Jersey, citing rising rates, inflation and supply-chain delays, and took billions in write-downs. It later withdrew from the Skipjack projects in Maryland. The damage was not confined to America: Ørsted discontinued its 2.6 GW Hornsea 4 project in the UK in 2025 on a “challenging business case,” and RWE cancelled a 2 GW Australian project as commercially unviable. The technology hadn’t failed. The financial structure had.

Cause of Death II: The Political Assault (2025–26)

Just as some developers restructured and pushed on, the second blow landed — this time from Washington. In January 2025 a presidential memorandum withdrew all areas of the Outer Continental Shelf from new offshore-wind leasing and paused federal approvals, permits and loans pending review. Over the following year, the administration escalated from blocking new projects to halting ones already under construction.

Stop-work orders hit Empire Wind, then Revolution Wind, and in December 2025 the Interior Department suspended five major projects at once — Vineyard Wind, Revolution Wind, Coastal Virginia Offshore Wind, Sunrise Wind and Empire Wind — citing national-security concerns about turbines interfering with military radar. That rationale was contested: the projects had cleared years of review involving the Coast Guard, Navy and Air Force, and several national-security figures publicly disputed it. The developers sued; courts granted injunctions letting construction continue; and by April 2026 the administration had missed the deadline to appeal, letting the five proceed — for now.

The precise damage is almost beside the point. The deeper lesson is that a fully-permitted, 80%-built project could be halted overnight — that the permit, the thing developers spent nine years securing, turned out to be revocable at political will. For an asset class whose entire premise is long-dated, contracted certainty, that is close to an existential problem.

Why Europe Succeeded Where America Stalled

The contrast with Europe is the analytically useful part, because it isolates what actually went wrong. Europe did not have better wind; it had a better environment for building — assembled patiently over three decades.

The Jones Act is the sharpest example of a self-inflicted wound. This century-old law requires that goods moving between US points travel on US-built, -flagged and -crewed vessels — and virtually no Jones Act-compliant offshore-wind installation vessels exist. Developers were forced into slow, expensive workarounds with feeder barges, adding cost and delay to an already-strained industry. Europe simply used its purpose-built fleet. America made the same job structurally more expensive by law, then acted surprised when it cost more.

The Nuance: Not Dead, Just Bloodied

A fair post-mortem has to note that the patient is not entirely dead. Several projects are delivering power. Vineyard Wind and South Fork are operating; on one December 2025 day, offshore wind supplied nearly 11% of New England’s electricity. The technology works, the resource is real, and the projects that survived the two collapses are producing clean power close to demand exactly as promised.

So the correct reading is not “offshore wind failed” but “the American attempt to scale it too quickly, on fragile contracts, in a reversible policy regime, failed.” That is a subtler and more useful conclusion — because it points to what a durable version would require, rather than writing off the resource.

Reading It Through the Frameworks

Offshore wind is a masterclass in the two risks the primer warns about most, and it is worth being explicit about them.

The revenue model was the first killer. A fixed-price offtake with no indexation converted an ordinary rate shock into an extinction event. The lesson generalises: on any long-lead capital project, the structure of the contract matters as much as its price. Indexed, flexible offtake survives a changing world; a locked price does not.

Policy reversibility was the second. The primer’s principle that “policy is the return” has a dark mirror: when the cash flow depends on a permit, a change of administration can become the dominant risk. Offshore wind priced the engineering and financing risk carefully and the political-durability risk barely at all — and it was the unpriced risk that did the most damage.