Trump's Regulatory War on U.S. Offshore Wind and the Implications for Global Renewable Energy Investors

The U.S. offshore wind sector is under siege. Since January 2025, a cascade of executive actions and regulatory rollbacks has effectively halted federal leasing for offshore wind projects, paused permitting for new developments, and initiated a sweeping review of renewable energy policies. These moves, framed as a defense of "low-cost energy" and "national security," reflect a strategic pivot toward dispatchable energy sources like natural gas and nuclear. For global renewable energy investors, the implications are twofold: a systemic risk to U.S. offshore wind infrastructure and a recalibration of opportunities in alternative offshore energy markets.

Systemic Risks: A Perfect Storm for Offshore Wind

The Trump administration's 2025 policies have created a high-stakes environment for offshore wind developers. The temporary withdrawal of all Outer Continental Shelf (OCS) areas from leasing, coupled with a moratorium on permits, has frozen the sector in its tracks. Projects like Atlantic Shores and Empire Wind, once cornerstones of the U.S. offshore wind pipeline, now face existential uncertainty. European developers, including Ørsted and Equinor, have already incurred billions in write-downs, with Ørsted alone requiring $9.4 billion to complete its remaining U.S. projects.

The risks extend beyond financial losses. The administration's Secretarial Orders 3437 and 3438 have introduced a new layer of regulatory scrutiny, mandating comparative efficiency analyses under the National Environmental Policy Act (NEPA) that disadvantage wind and solar projects. This "leveling of the playing field" is, in practice, a weaponization of bureaucracy against intermittent renewables. For investors, the message is clear: U.S. offshore wind is now a high-volatility asset class, with political risk eclipsing technical or market risks.

Undervalued Opportunities: Beyond Wind

While the U.S. offshore wind sector reels, alternative offshore energy markets are emerging as resilient and undervalued. Three sectors—floating solar, tidal energy, and hydrogen—stand out for their long-term potential and adaptability to regulatory shifts.

1. Floating Solar: The Next Frontier
   Floating photovoltaic (FPV) systems, particularly in hybrid configurations with wind or hydropower, offer a compelling alternative. Despite higher levelized costs of electricity (LCOE) compared to onshore solar, offshore FPV systems are gaining traction in regions with limited land availability. For example, hybrid projects in the North Sea, supported by subsidies like the Netherlands' SDE program, have achieved LCOEs as low as 3.6 EUR/MWh. The integration of FPV with aquaculture or pumped storage hydropower further enhances economic viability.

2. Tidal Energy: Harnessing Predictable Power
   Tidal energy, though nascent, benefits from its predictability and high energy density. While current projects face high capital costs, advancements in turbine technology and grid integration could unlock value. The UK's Sizewell C nuclear project, for instance, is exploring tidal energy as a complementary resource to stabilize baseload power.

3. Hydrogen: The Long Game
   Green hydrogen, produced via offshore wind and solar, is poised to become a cornerstone of decarbonization. Despite today's high costs (2806 USD/kWh), declining renewable energy prices and policy support—such as the EU's Hydrogen Strategy—could make hydrogen a viable export commodity by 2030. The U.S. Gulf Coast, with its existing infrastructure, is a prime candidate for hydrogen hubs, even as federal wind policies wane.

Strategic Investment Advice: Navigating the New Normal

For investors, the key lies in balancing caution with foresight. Here's how to position portfolios for resilience:

• Prioritize Infrastructure-Ready Projects: Focus on projects already in construction or with secured permits, such as Dominion Energy's Empire Wind 1, which leverages the domestically built Marmac 306 cable-laying barge. These assets are less exposed to regulatory reversals.

• Diversify into Hybrid Systems: Invest in hybrid offshore projects that combine wind, solar, and storage. The Borssele Wind Farm Zone's integration of floating solar with wind has demonstrated cost reductions and reliability gains.

• Leverage Political Risk Insurance (PRI): With U.S. policy volatility, PRI is no longer optional. Recent examples, such as the $36 million Mali solar project insured by Marsh, highlight its value in mitigating regulatory shocks.

• Monitor Hydrogen's Trajectory: While speculative, hydrogen's potential is too significant to ignore. Track policy developments in the EU and Asia, where governments are more likely to subsidize green hydrogen as a strategic export.

Conclusion: The Tides of Change

The Trump administration's regulatory war on U.S. offshore wind is a short-term setback, not a long-term defeat. While the sector faces systemic risks, the global energy transition is irreversible. Investors who pivot to alternative offshore technologies—floating solar, tidal, and hydrogen—will find themselves at the forefront of a new energy era. The lesson is clear: in a world of political uncertainty, resilience lies in diversification, innovation, and a willingness to bet on the next wave.