US presidency: wind power industry faces uncertainty after policy reversal on renewables
In August, the Trump administration announced the cancellation of $679m in funding for a dozen offshore wind development infrastructure projects – the latest setback to an industry that’s long been a target of President Donald Trump. US Transportation Secretary Sean Duffy called the projects ‘wasteful’ and said the funding would go instead to improving ports and other infrastructure.
The move follows a moratorium – issued in January – on new or renewed federal actions for both onshore and offshore wind projects, pending federal review, with the administration claiming there had been ‘various alleged legal deficiencies underlying the Federal Government’s leasing and permitting’ of such projects. It further withdrew wind energy leasing from all areas in the Offshore Continental Shelf.
During the past several months, the Trump administration has also ordered the construction of major offshore wind farms to be paused – although work on some projects continues and the federal government has lifted the order on at least one – while freezing the issuance of new authorisations. A court judgment in September meanwhile allowed construction on a wind project off Rhode Island to continue.
Attorney-generals from various states and non-profits have responded to the Trump administration’s actions by filing lawsuits fighting for the reinstatement of federal funding and for approvals of wind and other renewable energy projects that have a federal nexus.
President Trump has deconstructed the EPA […] which really hampers the capacity of the federal government to keep track of what is going on with climate change
Don Smith
Editor, IBA Journal of Energy & Natural Resources Law
Andre Monette, Council Member for the IBA Energy, Environment, Natural Resources and Infrastructure Law Section, highlights that any federal grant will have included a provision to allow it to be terminated ‘if an award no longer effectuates the programme goals or agency priorities.’ The Trump administration has used that provision to cancel many projects relating to the climate crisis. ‘That’s what’s being litigated right now,’ explains Monette. ‘Is that actually binding? Is it not? And how much discretion does the president have to pull back that kind of grant fund?’
Beyond that, there’s little redress for the project developers who were counting on those federal grants for their future wind projects, explains Monette, who’s a member of the Environmental & Natural Resources practice group at Best Best & Krieger in Washington, DC. ‘You could file a lawsuit, challenge the constitutionality of it, but it’s really tough to do that on a tax incentive programme,’ he says. ‘There’s no constitutional violation for changing the tax law unless you’re targeting someone individually or taking away someone’s constitutional rights, and that’s not happening here.’
In July, Congress passed legislation – the One Big Beautiful Bill Act – at the behest of the administration which rescinded significant Biden-era tax incentives aimed at encouraging renewable energy projects. Cities and private developers relied in large part on tax rebates for the money they spent building clean energy projects, and the legislation passed in July phases these out, Monette explains. Even projects already underway will be affected, because the legislation shrunk the timeline to be able to enjoy the tax incentive from 2032 to the end of 2025. This change ‘removes financial incentives for doing projects over the long term,’ adds Monette.
In his view, the One Big Beautiful Bill Act will have much deeper – and long-term – consequences than the heightened review of federal grants for clean energy projects in place since January. He says the president had ‘stretched the bounds of his authority’ by cancelling already approved grants, but the July bill ‘actually makes it legal, what the president was trying to do.’
‘I don’t know why someone today would invest in a big renewable energy project in the US because we don’t really know what is going to happen,’ says Don Smith, Editor of the IBA Journal of Energy & Natural Resources Law, noting the policy upheavals. ‘When one looks at it from an economic lens, this is going to have long-term impacts.’
US states have long had a fair amount of leeway to determine their overall energy mix, says Michael Showalter, an officer of the IBA Environment, Health and Safety Law Committee. He doesn’t expect states to back away from clean energy projects due to pressure from the administration if it goes against their interests. ‘Would the Trump administration ever propose to go to Texas and say: “No, you can’t build any more solar”? No way – Texas is one of the most reliably Republican states in the country, and they found ways to solve some of their energy problems by promoting solar and that’s not going to stop,’ says Showalter.
Showalter, who’s a partner at ArentFox Schiff in Chicago, notes that the Trump administration has, to some degree, issues with the aesthetics of wind plants and some concerns about whether they’re viable, including without subsidies. But he doubts it’ll commit to shutting down the wind industry entirely.
President Trump has used the full breadth of the US administrative state to reverse the climate legacy of his predecessor, Joe Biden. In January, he signed six executive orders that collectively sought to abandon the shift towards clean energy, while ramping up US oil production. Trump also declared a national energy emergency, giving him broad discretion to speed up the permitting of oil, gas and power projects.
This was done to rectify what the White House terms America’s ‘inadequate energy supply and infrastructure’ and because the Trump administration believes it’s in the ‘national interest to unleash America’s affordable and reliable energy and natural resources.’
President Trump has also taken aim at the US Environmental Protection Agency (EPA). In July, the EPA announced it would shutter its Office of Research and Development, which provided expertise for environmental policies and regulations, as part of an efficiency review. Meanwhile, a new Office of Applied Science and Environmental Solutions – intended to allow the EPA to put science ‘at the forefront of the agency’s rulemakings and technical assistance to states’ – has been announced.
‘Trump has deconstructed the EPA; many experts have left or been fired,’ explains Smith, who’s an associate professor of the practice of law at the University of Denver Sturm College of Law. ‘This really hampers the capacity of the federal government to keep track of what is going on with climate change.’
Smith adds that the executive order aimed at boosting the country’s energy production by ‘implementing action plans to suspend, revise, or rescind all agency actions identified as unduly burdensome’ will probably have a significant impact. ‘A lot of what they’re doing under that is reducing the requirements for particularly fossil fuel-fired energy production to take account of different pollution standards,’ says Smith. This and the national emergency order together ‘diminish what companies operating in the US have to abide by,’ he explains.
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