The New State of Wind Power

We are less than a month into the second Trump administration, and it is abundantly clear that the rules under which renewable developments operate are undergoing drastic change. One of the drivers of this change is the presidential executive order, with one in particular having paused both offshore wind lease sales in federal waters and the issuance of approvals, loans, and permits for both onshore and offshore wind projects. So, with this order now in place, what does it mean for the future of wind power in the United States?

As shown above, BTU Analytics currently tracks over 800 wind projects, amounting to over 228 GW of potential nameplate capacity still in the development phase across the nation and has kept tabs on the availability of federal leases as more and more states have incorporated offshore wind developments into their long-term energy strategies. However, the order’s pause on new permits puts much of this capacity at risk of never being constructed. After removing projects in the early stages of the development process and those in the middle stages that have yet to secure a permit, the future of wind looks much different than what it did just a few weeks ago.

With the new order, any projects early in their development have even less chance of being developed even beyond the typical local pushback. Unfortunately for ISOs, most of their prospective wind capacity is in the early stage of development. ERCOT, MISO, and SPP — the three ISOs with the best wind resources — would no longer be able to pursue over 92 GW of wind buildout that would likely assist each in meeting their respective load growths. This being said, the Midcontinent is better positioned to absorb this loss in potential capacity, as there are fewer people demanding power, many smaller, early-stage projects never become developed anyway, and the political climate of the region allows for the possibility for the postponement of coal retirements with less public pushback. However, the order’s targeting of both onshore and offshore wind development will have more tangible effects in regions that do not share these characteristics.

Renewables will always have some level of intermittency, but if this expected drop in wind development comes to fruition, there could be some unintended spillover effects into power prices. Both PJM and NYISO have large load centers they need to serve with power demand expected to reach unprecedented levels over the next 5–10 years, largely stemming from AI-related demand. Power prices in those regions could increase significantly if other generation technologies are not deployed to make up this loss in planned capacity. In New York and New England, a handful of large offshore wind farms are still expected to become operational and push some gas capacity out of the generation stack, but most of their planned capacity is no longer viable due to it being located in federal waters. As a result, gas burn is likely to increase in these areas if these projects fall through and load increases per the ISOs’ prospective load forecasts. While capacity factors for wind projects typically drop in the summer, these postponements and cancellations will especially matter during the winter peak, when gas is also used to heat homes in the Northeast, which regularly sees fuel switching due to higher gas prices present during the coldest months.

The removal of wind from consideration in future generation developments can have significant impacts to not just the Northeast but the entire nation, as all ISOs and RTOs will likely need to revisit their resource strategies. Auctions in federal waters are already being cancelled, and projects that were unlikely to be operational before are — for all intents and purposes — dead for the remainder of this administration. This will likely lead to a greater reliance on fossil fuels to meet rising energy demand driven by AI and other technological advancements, but critical questions remain: will the grid's future requirements be met, and can our existing infrastructure support it?

Be sure to check back with BTU Analytics regularly as we continue to cover this rapidly changing energy landscape.

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