Atlantic Ambitions

This Week's Trend In Brief:

• Last week, Maryland and federal officials signed a memorandum of understanding to boost the state’s offshore wind industry and help meet its ambitious clean energy targets, which include at least a 60% reduction in net emissions by 2030. 
   

• Maryland Governor Wes Moore declared the agreement would create jobs, invigorate the economy, and cement the state as a wind energy hub, but as we have seen in recent months, that optimistic outlook is tempered by the reality that a myriad of factors can make the process for developers more arduous than expected. 
   

• While market conditions have caused offshore wind trouble across the country, the economic uncertainties that threaten these projects can be exacerbated by opposition from those who may not be so receptive to building renewable projects when it’s their coast or backyard involved.
   

• Indeed, local residents, who are often buttressed by a professionalized and well-funded activist groups, employ petitions, public hearings, administrative interventions, and lawsuits to disrupt and delay these projects, even if they profess support for renewable energy.
   

• This week’s agreement highlights policymaker’s support for climate projects but that won’t change the economic or stakeholder reality energy developers will need to navigate to get projects approved, sited, and built, making it crucial to have a well-informed plan to manage the tension between those policymakers and local communities backed by or spurred on by external activists. 

Digging Deeper:

 
Last week, Maryland and federal officials signed a memorandum of understanding to boost the state’s offshore wind industry and help meet its ambitious clean energy targets, which include at least a 60% reduction in net emissions by 2030. U.S. Department of the Interior Secretary Deb Haaland praised the agreement as “another important step towards a clean, reliable energy future with good-paying jobs and economic opportunities that are accessible to communities across America.” The agreement comes several months after the U.S. Bureau of Ocean Energy Management (BOEM) announced the first-ever Atlantic lease sale, which included one area off the shores of Delaware and Maryland. This new agreement shows the federal government and Maryland support for the burgeoning offshore wind industry, but the reality may be more difficult than officials and developers anticipate.
 
After the agreement was announced, Maryland Governor Wes Moore (D) declared it would create jobs, invigorate the economy, and cement the state as a wind energy hub, but that optimistic outlook is tempered by the reality that a myriad of factors can make the process for developers more arduous than expected. As we noted last November after Danish wind company Ørsted pulled out of its planned offshore wind projects in New Jersey, even state and federal support for offshore wind projects could not keep them afloat. Billions in incentives and subsidies were not sufficient to keep the projects moving forward with skyrocketing interest rates, higher inflation, and supply chain woes. While the Maryland state legislature passed legislation last year aiming to stave off these problems for offshore wind projects in the state, Ørsted still announced it was reconsidering its offshore plans in Maryland several months later due to “market conditions, including inflation, high interest rates and supply chain constraints.” The legislation and new memorandum of understanding are intended to reassure developers like US Wind, which has several projects in Maryland, but these economic concerns can quickly become exacerbated by other outside factors that can be hard to predict.
 
While the new agreement aims to alleviate economic concerns for developers, they are not the only challenges companies face at a time when local officials, residents, and even environmental advocates may not be so receptive to building renewables when it involves their coast or backyard. Darlene Park, the leader of the Allegany Citizens and Neighbors for Homeowners Rights in Maryland, recently stated “she isn’t against renewable energy” but “worries about the dangers 492-foot wind turbines could pose to her community.” Park went on to affirm that “Wind turbines are great” but “belong where they won’t bother anybody.” Park is emblematic of a growing coalition of environmental activists who oppose renewable energy projects in their – and others’ – backyards. Some local officials don’t support offshore wind either. In February 2024, Ocean City Mayor Rick Meehan announced he rejected a proposal from US Wind over “the potential impact of offshore wind development on tourism.”
 
Indeed, opponents of renewable projects have employed various tactics to delay or cancel projects, including circulating petitions, attending public hearings, and engaging in administrative interventions and lawsuits against developers and local governments. The Vineyard Wind project off Martha’s Vineyard has faced many legal challenges since receiving its permits, and the Gemini Solar Project in Nevada has faced years of resistance from environmental groups and local residents concerned about its environmental impact despite its $1.2 billion investment in clean energy. Local restrictions on renewable projects have become more and more common as communities across the U.S. grow wary of the projects and their impacts, and project opponents cite various concerns about their environmental impact and effectiveness. These activists also have become uncompromising in their demands and command significant resources, taking these fights to every level of government and every step of the project approval process with “little incentive to proclaim victory and depart the field when their fundraising and grassroots energy relies on never being satisfied.”
 
As renewable projects continue to face increasing pressure from activists, concerned residents, and others, companies must stay ahead of these challenges to avoid prolonging the already long approval process. The agreement between Maryland and federal officials shows support for clean energy projects even amidst uncertain economic conditions, but companies hoping to build the transition must anticipate delays and disruptions from a range of stakeholders. Public affairs professionals and the companies they represent must assess who is likely to oppose a project, from concerned residents to national activist groups that are increasingly supporting local activists in their fights against industry and bids for funding. That requires a proven playbook to map the key stakeholders, determine what influences them, and identify how they operate to stay two steps ahead of any challenges and successfully get projects built.  

Trends in Energy is your weekly look at key trends affecting the energy industry, brought to you by the competitive intelligence experts at Delve. As the political and regulatory landscape continues to shift, reach out to learn how our insights can help you navigate these challenges.

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