Page 20: of Marine News Magazine (March 2025)

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Feature

Offshore Wind

Lawyers at H and K, writing about the impacts on the tax credits under the In? ation Reduction Act. It does not. approvals process, generally, caution that “Federal agencies Tax credits are allowed by statute. They cannot be rescind- cannot issue new approvals, rights of way, permits, leases ed or denied by executive order. Any rollback would re- or loans for onshore or offshore wind projects pending a quire action by Congress.” In the same advisory, Norton comprehensive assessment and review of federal wind leas- Rose contemplated a different angle, musing that: “Many ing and permitting practices, with no clear timeline for of the backers of the US offshore wind projects are large when this may occur.” foreign-owned utilities and oil companies that have spent

When actual legislation is pointed at offshore wind, Ex- tens to hundreds of millions of dollars on the projects. If ecutive Orders are not suf? cient to change the trajectory. such projects were ultimately cancelled, some could have

Offshore wind investment bene? ts greatly, on the ? nancial claims under bilateral investment treaties.” side, from the Biden-driven In? ation Reduction Act, of The one time goal of “30 by 30” (30 GW of wind gener- 2021 (the IRA). A report from the Congressional Research ated electricity by 2030) is being dramatically sliced. On

Service (CRS) explains: “The primary federal tax provi- Jan. 21, 2025, one day after Trump’s inauguration and the sion supporting offshore wind is the energy investment tax ? urry of Executive Orders, analysts Rystad Energy offered credit (ITC). It provides a 30% tax credit for offshore wind that: “The US currently has around 2.4 GW of advanced- projects that begin construction before January 1, 2026.” stage offshore wind developments that have reached ? nal

The CRS report adds that: “Section 13502 of the IRA pro- investment decision and are under construction, which are vides a new tax credit for the domestic production of wind unlikely to be impacted by the order. Moderate risk amid components and related goods such as specialized offshore the unfavorable investment climate is present for 10.5 GW wind installation vessels. For offshore wind vessels, the of projects which secured necessary permits but have not credit is 10% of the sales price.” Congressional action, in reached investment decisions. The remaining 25 GW of the form of new legislation, is required to undo provisions early-stage projects are unlikely to see any progress under already in the law,” H and K explains. the administration.”

In the week following the Inauguration (and Executive A number of projects that had not yet gained BOEM’s

Orders), a Project Finance publication from the interna- imprimatur were completely scuttled in 2023 and 2024, tional law ? rm Norton Rose stated: “Many people have due to purchasers of electricity being unable to commit due been asking whether the freeze on disbursements affects to rising costs and the inability of developers to successful- ly rebid. The long list of cancelled projects is well known; most recently, in early February, 2025, Shell pulled the plug on participation in the Atlantic Shores Offshore wind proj- ect (a joint project with EDF Renewables that had aimed to produce 2.8 gW of electricity), causing the State of New

Jersey’s Board of Public Utilities (NJBPU) to cancel the bidding process for a pending offshore wind solicitation.

Though the Biden years had seen forward progress on offshore wind (where project development times might be half a decade, or longer, as noted), actual activity in the sector, was still in its nascent stages. A presentation by the trade group Oceantic pegged the electricity actually being produced at end 2024 in commercial projects at 310 MW (a subset of the 2.4 GW in Rystad’s reckonings).

Edison Chouest SOV

Not surprisingly, the politics surrounding offshore wind

ECO EDISON working are complicated. The offshore service industry generally on Ørsted projects.

bene? ts from actions friendly to offshore oil and gas ac-

Ørsted 20 | MN March 2025