In a joint appeal, six U.S. governors have called upon President Joe Biden to provide additional support for the nation's beleaguered offshore wind projects. Governors Ned Lamont of Connecticut, Wes Moore of Maryland, Maura Healey of Massachusetts, Phil Murphy of New Jersey, Kathy Hochul of New York, and Dan McKee of Rhode Island have expressed concerns that without federal intervention, the future of the country's offshore wind initiatives hangs in the balance.
These six states have been the driving force behind offshore wind development in the United States, with the majority of planned projects located off their coastlines. However, they contend that a confluence of economic challenges, including inflationary pressures, Russia's invasion of Ukraine, and ongoing supply chain disruptions stemming from the COVID-19 pandemic, now pose significant threats to these endeavors.
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“Inflationary pressures, Russia's invasion of Ukraine, and the lingering supply chain disruptions resulting from the COVID-19 pandemic have created extraordinary economic challenges that threaten to reverse these offshore wind gains,” the governors wrote in their joint letter. “Instead of continued price declines, offshore wind faces cost increases in orders of magnitude that threaten States' ability to make purchasing decisions. These pressures are affecting not only procurements of new offshore wind but, critically, previously procured projects already in the pipeline.”
The governors outlined three specific actions that the Biden administration could undertake to support the U.S. offshore wind industry. First, they urged the Federal Government to update the Inflation Reduction Act's (IRA's) tax credit provisions to ensure that offshore wind farms, including near-term projects, become fully eligible for federal clean energy tax credits.
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Additionally, the letter called for the establishment of a program aimed at sharing revenue generated by offshore wind projects with the states. This measure is intended to alleviate the financial burden on ratepayers and reduce costs for developers, making offshore wind more economically viable.
Lastly, the governors appealed for expedited permitting processes to prevent unnecessary cost escalation and unlock the full potential of the United States' clean energy economy. This move, they argue, is crucial for maintaining and expanding the offshore wind sector in the face of mounting economic challenges.
