Offshore Wind US Project Reset, Ørsted $4 B Loss, 2 NY Contracts Awarded, and 5 Projects Paused (2021 to 2026)

US Offshore Wind Project Viability, Ørsted and Equinor Secure New Contracts

The U.S. offshore wind sector is undergoing a fundamental strategic reset, moving away from a model of speculative, low-cost bids toward one based on financial resilience and bankable contracts. This transition was forced by severe market corrections between 2021 and 2024, where economic and technological failures rendered early project agreements unviable. Since 2025, this recalibration has been accelerated by a paradoxical environment of intense domestic political opposition colliding with an acute geopolitical crisis, which together redefine the industry’s value proposition from climate-centric to a matter of national and economic security.

• Between 2021 and 2024, the industry’s financial model fractured. The levelized cost of energy (LCOE) for a U.S. offshore wind project surged nearly 50% to $114.20 per megawatt-hour, driven by inflation and supply chain constraints. This economic pressure led to high-profile cancellations, including Ørsted’s Ocean Wind 1 and 2 projects in New Jersey and Avangrid’s Commonwealth Wind in Massachusetts, which were deemed unfinanceable under their original power purchase agreements (PPAs).
• A critical technology failure in April 2024 exposed the sector’s supply chain vulnerabilities. New York authorities denied contracts for three major projects totaling over 4 GW after General Electric (GE) Vernova canceled its plans for a new 18-megawatt turbine upon which the projects depended. This event highlighted the significant risks of building development pipelines on immature technology.
• From 2025 to today, the market has bifurcated into state-level pragmatism versus federal political risk. In response to prior failures, New York awarded new, higher-priced contracts in February 2024 to salvage Equinor’s 810 MW Empire Wind 1 and Ørsted’s 924 MW Sunrise Wind. Concurrently, a future scenario for 2026 projects a federal administration actively suspending work on five major projects, forcing developers like those behind Revolution Wind to seek court orders to continue construction, illustrating how states are fighting to overcome political risks.

$4 B in Losses, Ørsted Cancels Two New Jersey Offshore Wind Projects

A wave of project cancellations, driven by untenable PPAs that failed to absorb post-pandemic inflation and supply chain volatility, has resulted in billions of dollars in financial impairments and a significant downward revision of U.S. offshore wind capacity targets. These failures represent a necessary, albeit painful, market correction, exposing the financial unsustainability of the industry’s initial development phase.

• The most significant financial impact came in October 2023, when Ørsted announced its decision to cease development of the Ocean Wind 1 and 2 projects. The developer recorded impairment losses of DKK 28.4 billion (approximately $4 billion) due to the cancellations, citing adverse impacts from supply chain issues, rising interest rates, and a lack of new tax credits.
• In another key event, Avangrid terminated its contract for the 1, 200 MW Commonwealth Wind project in Massachusetts after determining it was unfinanceable. The company paid a $48 million penalty to state utility companies to exit the agreement, highlighting the extreme measures developers took to escape loss-making contracts.
• The future scenario for 2026 indicates that policy-driven threats compound these economic challenges. A hostile federal administration is projected to reduce the nation’s planned offshore wind capacity by a substantial 35.68 GW, with New Jersey regulators preemptively canceling the approval for the 1.5 GW Atlantic Shores project in response.

Table: Major US Offshore Wind Project Cancellations and Terminations (2023-2025)

US East Coast vs. Europe, Ørsted and Equinor Pivot Project Strategies

While the U.S. East Coast remains the geographic focus for domestic offshore wind development, its growth trajectory has been fundamentally altered by project failures, forcing a strategic recalibration that contrasts with steady expansion in the more mature European market. The divergence highlights how economic and political instability in the U.S. is creating a fragmented and uncertain development environment compared to Europe, where major capital continues to be deployed.

US Lags Europe in Offshore Wind Capacity

This chart quantifies the stark difference in deployed capacity between the US and mature European markets, directly supporting the section’s focus on the divergent growth trajectories.

(Source: WIRED)

• From 2021 to 2024, U.S. activity was concentrated in the Northeast, with Massachusetts, New York, and New Jersey leading development. This period saw the launch of the nation’s first commercial-scale projects, Vineyard Wind 1 (800 MW) and South Fork Wind (132 MW). However, this progress was overshadowed by high-profile cancellations in the same states, signaling deep market instability.
• The future scenario for 2025-2026 intensifies this fragmentation. State-level actors in New Jersey and Massachusetts are shown reacting to federal hostility, with NJ regulators canceling the Atlantic Shores approval and Massachusetts delaying offtake contracts. This demonstrates a growing rift between state goals and federal policy.
• In contrast, global investment in European offshore wind continues unabated, underscoring the sector’s long-term financial viability outside the U.S. Major commitments include a joint venture between KKR and RWE requiring over $15 billion for UK projects and a framework agreement between Masdar and Iberdrola for up to €15 billion in German and UK assets, showcasing the confidence of Europe’s top companies in their home market.

GE Vernova 1 Turbine Cancellation, US Offshore Wind Tech Risk (2021 to 2026)

The U.S. offshore wind industry’s aggressive adoption of next-generation, commercially unproven turbine technology created a systemic risk that materialized in 2024, forcing developers and policymakers to reassess technology roadmaps and prioritize supply chain certainty over theoretical performance gains. This “technology arms race” proved to be a critical point of failure, directly causing the collapse of multiple gigawatts of planned capacity.

China Dominates Wind Component Manufacturing

This chart illustrates a key source of technology and supply chain risk by showing North America’s minimal manufacturing capacity compared to China’s dominance.

(Source: Blake Clough Consulting)

• Between 2021 and 2024, developers based project proposals on ever-larger turbines to improve project economics, a high-risk strategy that backfired spectacularly. The pivotal event occurred in April 2024, when New York’s planned procurement of over 4 GW of power from the Attentive Energy One, Community Offshore Wind, and Excelsior Wind projects unraveled. The state denied the contracts after GE Vernova confirmed it would not produce the 18-megawatt Haliade-X turbine that the bids depended on.
• This incident demonstrated that the industry’s focus on immature technology introduced a critical vulnerability. The failure validated concerns that basing bankable, multi-billion-dollar infrastructure projects on equipment that did not yet have a proven manufacturing process or operational track record was an untenable risk.
• From 2025 onward, the surviving projects are proceeding on a more conservative technology basis. The successful renegotiation of contracts for Empire Wind 1 and Sunrise Wind suggests a pivot toward commercially available and reliable turbine models. The primary challenge for projects in 2026, such as Revolution Wind, has shifted from technological maturity to navigating politically motivated legal and regulatory hurdles.

SWOT Analysis, US Offshore Wind Geopolitical and Economic Pressures

The U.S. offshore wind sector is navigating a complex risk environment where severe domestic policy and economic weaknesses are being counter-weighed by an external geopolitical shock that powerfully reinforces the strategic value of domestic renewable energy. The industry’s greatest threat—near-term political opposition—is ironically blunted by its greatest opportunity: the ability to provide energy security in a volatile world.

• Strengths: The core strength is shifting from policy-driven demand to a national security imperative, reinforced by resilient states willing to renegotiate contracts to ensure project viability.
• Weaknesses: The industry is burdened by a high-cost structure, investor uncertainty following widespread cancellations, and acute vulnerability to federal political shifts.
• Opportunities: Global energy price shocks make the stable, predictable cost of offshore wind highly attractive, while successful legal challenges against federal overreach create pathways for projects to advance.
• Threats: The primary threats are direct political interference designed to halt development and the potential for further supply chain disruptions, such as the cancellation of essential components like turbines.

Table: US Offshore Wind SWOT Analysis

2026 Outlook, 5 US Offshore Wind Projects Face Continued Political Risk

If geopolitical tensions surrounding the Strait of Hormuz persist and keep global oil prices elevated, watch for a pragmatic, security-driven shift in U.S. energy policy discourse that reframes domestic renewables as a strategic asset. This could create an unexpected lifeline for the beleaguered offshore wind industry, overriding near-term political opposition with the non-negotiable logic of national and economic security.

• If this happens: A U.S.-Iran conflict or blockade in the Strait of Hormuz chokes off oil supply, keeping Brent crude prices sustained above $100 per barrel and causing severe price shocks for gasoline and natural gas.
• Watch this: Observe the rhetoric from business leaders, national security officials, and fiscal conservatives. A shift from discussing offshore wind in terms of climate change to framing it as a tool for energy independence, price stability, and economic resilience would signal a major change in the political calculus.
• These could be happening: The powerful economic argument for energy sources immune to foreign conflict may force a pragmatic re-evaluation of federal policy, even among skeptics. State governments in New York and Massachusetts could leverage the national security narrative to justify continued support for projects. Developers with paused projects, such as Stonepeak, CIP, and GIP, may find a more receptive audience, while the relative costs of renewables versus fossil fuels shift dramatically, potentially altering the competitive dynamic with technologies like battery energy storage systems (BESS).

The questions your competitors are already asking

This report covers one angle of the US offshore wind market’s strategic reset and commercial viability. The questions that matter most depend on your work.

• Which offshore wind developers are gaining or losing ground in the US market after the 2024 project reset?
• What is the outlook for US offshore wind deployment by 2030, factoring in recent project cancellations and the Strait of Hormuz crisis?
• What is the status of the new offshore wind contracts awarded to Ørsted and Equinor in New York?
• What are the supply chain and technology risks for US offshore wind projects following GE Vernova’s 18 MW turbine cancellation?

This report does not answer these. Enki Brief Pro does.

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