• The Trump administration has canceled $679 million in federal funding for offshore wind projects, ordering an immediate stop to construction on the nearly complete Revolution Wind project.
  • A new presidential memorandum, effective January 21, 2025, withdraws all areas on the Outer Continental Shelf from wind leasing pending a review of federal permitting practices.
  • The policy shift, citing concerns over energy reliability and costs, is expected to result in higher electricity rates for consumers and has drawn sharp criticism from state officials.

The Trump administration has moved to cancel $679 million in federal funding for major offshore wind projects, dealing a severe blow to the burgeoning U.S. renewable energy sector and halting construction on the nearly completed Revolution Wind project. The order, which took effect immediately, mandates a stop to all work on projects that had previously received federal backing.

The most significant immediate impact is on Ørsted's Revolution Wind, a project that was reportedly 80% complete and scheduled to bring electricity to at least 350,000 homes in Connecticut and Rhode Island. According to people familiar with the matter, the sudden cessation will result in significant sunk costs for the Danish energy giant and its partners.

In a broader policy withdrawal, a presidential memorandum effective January 21, 2025, withdraws all areas on the Outer Continental Shelf from wind leasing. The move initiates a comprehensive review of federal permitting and leasing practices for wind projects, targeting concerns about energy reliability, impacts on commercial fishing, environmental effects, and energy costs for Americans.

“This decision is about protecting ratepayers and ensuring we have a reliable grid,” said an administration official who asked not to be identified discussing internal policy. “We need to thoroughly review the impacts of these large-scale projects before committing more taxpayer dollars.”

The administration is also preparing to revoke federal approval for other major offshore wind efforts, including a proposed 2-gigawatt project off the coast of Maryland, signaling a sector-wide reassessment. The moves represent a sharp reversal from prior federal support and create immediate uncertainty for developers who had planned billions in investments along the Atlantic coast.

Local and state officials reacted with fury. “This is a devastating blow to our clean energy goals and a betrayal of the workers who have been building this project,” said one state energy official from the Northeast who was not authorized to speak publicly. “The decision appears politically motivated and ignores the economic and environmental benefits these projects bring.”

The pause is expected to result in higher electricity rates for consumers in the affected regions, as anticipated cost savings from new renewable generation will not materialize. The offshore wind industry was also seen as a major driver of job creation and regional economic development, especially for coastal states that had invested heavily in supporting the infrastructure.

Ørsted did not immediately respond to a request for comment on the funding cancellation or its plans for the idled project. The company’s shares were down nearly 4% in European trading following the news.

The policy shift creates significant uncertainty for the U.S. renewables investment landscape and may prompt firms like Ørsted to redirect capital to more favorable regions. Legal challenges from states or developers aiming to reinstate project approvals are widely anticipated.