USD 679 Million in Federal Funding Withdrawn, Multiple Offshore Wind Projects Suspended as U.S. Wind Industry Takes Another Hit

According to the Associated Press, the U.S. Department of Transportation on Friday withdrew USD 679 million in federal grants previously allocated to twelve offshore wind installations, representing the Trump administration’s latest action against America’s nascent offshore wind sector. The department indicated that these funds will be redirected, potentially toward port modernization and other critical infrastructure upgrades. Over recent months, a series of wind projects nationwide has been placed on hold, and analysts caution that undermining these clean-energy initiatives could impede climate-change mitigation, disrupt the U.S. energy portfolio, weaken domestic competitiveness in renewables, and ripple through related industries such as shipping and steel, while endangering power-intensive operations including data centres and artificial intelligence research.

On August 22, U.S. regulators ordered Denmark’s Ørsted to cease all work on its large-scale Rhode Island offshore wind development pending a national-security and environmental review. With an estimated investment of USD 1.5 billion and projected to supply electricity to 350,000 homes by late 2026, the project had reached approximately 80 percent completion, as reported by Reuters. Earlier this month, the Trump administration canceled the Lava Ridge wind farm approved under the Biden administration, citing “significant legal deficiencies” and procedural lapses, and in April, Norway’s Equinor saw its New York offshore proposal similarly halted on a temporary basis.

The New York Times notes that President Trump has long opposed wind power, issuing an executive order on his first day in office this January to suspend federal approvals for new offshore wind ventures. He has championed a return to fossil-fuel–centric policies, pledging to restore American “energy dominance” by promoting coal, oil, and natural gas—fuels that emit greenhouse gases and drive global warming.

Data compiled by Reuters reveal that from January through July of this year, fossil fuels accounted for 56 percent of U.S. utility power generation, while clean-energy sources—including wind and solar—contributed 44 percent. The New York Times further reports wind energy now exceeds 10 percent of national electricity supply and serves as the primary source in states such as Iowa, Oklahoma, and Texas.

The abrupt policy reversal threatens thousands of jobs and billions in investment. The Biden administration had targeted 30 GW of offshore wind capacity by 2030—enough to power 10 million homes—as part of its climate agenda. Yet supply-chain delays, local opposition, and now federal hostility have stalled many planned projects, leading some developers to pause future U.S. commitments.

Experts quoted in The Hill warn that withdrawing from clean-energy leadership may drive up consumer costs, slow technological innovation, and erode America’s edge in critical sectors. Projections indicate that power demand and prices could soar in the coming years, compounding these concerns.

While Trump advocates boosting liquefied natural gas production, exports, and nuclear energy to expand supplies, Jonathan Elkind of Columbia University’s Center on Global Energy Policy argues that excluding renewables undermines the goal of maximizing the nation’s energy potential. He insists that in an era of rapid technological transformation, America must choose whether to lead in innovation and solutions or fall behind.

Energy-security analysts also caution that reducing domestic energy diversity endangers national security by increasing dependence on volatile global oil markets. A July report by the Energy Security Leadership Council and think tank SAFE emphasizes that renewables, with no fuel cost and limited price swings, are essential to a stable, secure energy mix. The American Petroleum Institute, however, contends that clean energy and natural gas can coexist as complementary sources.

The fallout extends beyond energy markets. Clark University economist Wayne Gray observes that policy uncertainty dampens corporate motivation to develop next-generation clean technologies, while Elkind warns suspensions will reverberate through shipping, steel, and other key industries. Rising electricity bills already strain consumers: As of late July, average U.S. retail power prices climbed 5.5 percent year-over-year, driven partly by data-centre and AI expansions. SAFE’s Avery Ash asserts that only rapidly deployable renewables can meet surging power needs.

Democratic lawmakers have strongly criticized the rollback of renewable policies, claiming that raising costs and regulatory hurdles stifles the most affordable, scalable energy sources. Conversely, API director Rachel Fox argues that natural gas is best positioned to satisfy the nation’s evolving energy demand over the next decade.

Despite federal pushback, some U.S. firms continue to invest in renewables. Ford Motor Company, for instance, pledged nearly USD 2 billion toward affordable mid-size electric vehicles after losing federal EV tax credits. Still, Ash warns that without a reliable renewable-powered grid, energy-intensive sectors such as AI and electric vehicles will face constraints. The pressing challenge, he concludes, is not merely meeting today’s demand but ensuring sufficient power for tomorrow’s innovation.

Jonathan Elkind adds that deprioritizing renewables will impede domestic development of AI and data centres, magnify household energy costs, and hamper emerging manufacturing growth nationwide. Liang Huaixin of the National Security and Governance Institute at the University of International Business and Economics told the Global Times that as AI and related technologies advance, large-scale computing and data storage will require vast electricity supplies, and the government’s suppression of wind power could undermine overall power availability and stifle these critical industries.