The US government’s recent actions have sparked widespread uncertainty across the energy sector, job market, and financial investments. A dual set of executive orders has significantly altered the trajectory of offshore wind development, EV cash initiatives and renewable energy, prompting analysis of the consequences for contractors, major corporations, and global investment strategies.
The policy shift
On 21 January 2025, President Trump issued two critical directives in an effort to bring down domestic energy prices and gain more negotiating power:
- Declaration of a National Energy Emergency – This order places renewed emphasis on “energy independence” and traditional fossil fuel development, aiming to stabilise energy costs and address perceived threats to national security.
- Temporary Withdrawal of Offshore Areas for Wind Leasing – This directive halts new offshore wind leases and initiates a review of leasing and permitting practices, effectively freezing progress on numerous wind energy projects.
What is the mindset behind these orders?
The US government order states: the “need to foster an energy economy capable of meeting the country’s growing demand for reliable energy, the importance of marine life, impacts on ocean currents and wind patterns, effects on energy costs for Americans –- especially those who can least afford it –- and to ensure that the United States is able to maintain a robust fishing industry for future generations and provide low cost energy to its citizens..
“This withdrawal temporarily prevents consideration of any area in the OCS for any new or renewed wind energy leasing for the purposes of generation of electricity or any other such use derived from the use of wind. This withdrawal does not apply to leasing related to any other purposes such as, but not limited to, oil, gas, minerals, and environmental conservation.
“Nothing in this withdrawal affects rights under existing leases in the withdrawn areas. With respect to such existing leases, the Secretary of the Interior, in consultation with the Attorney General as needed, shall conduct a comprehensive review of the ecological, economic, and environmental necessity of terminating or amending any existing wind energy leases, identifying any legal bases for such removal, and submit a report with recommendations to the President, through the Assistant to the President for Economic Policy.”
Job market uncertainty
The US energy sector’s labour force is likely to bear the brunt of these decisions. Suppliers and contractors connected to the US offshore wind industry—including engineers, construction workers, and supply chain professionals—face an uncertain future. Existing projects will continue but at a reduced pace, with fewer new opportunities emerging over the next few years.
Transition challenges for contractors
The future of US energy policy may hinge on balancing short-term economic priorities with long-term sustainability goals, leaving both workers and investors to grapple with the uncertainty ahead.
Many contractors on both sides of the pond will need to reconsider their career paths. A shift to onshore renewable projects, battery storage systems, or even traditional oil and gas sectors may be required in the US. However, such transitions often demand additional training and certification, potentially leading to temporary unemployment or underemployment.
The ripple effect extends to industries such as manufacturing, logistics, and environmental consultancy, all of which benefit from a thriving offshore wind sector.
According to Offshore Energies UK and trade news site, Upstream Online, the UK government is committed to renewable energy and has placed a ban on new oil and gas licenses. There are signs that the UK’s energy transition is not being put on hold and in the short-term thousands of jobs will be lost in the oil and gas industry.
One positive sign is the launch of the skills passport to help UK North Sea workers switch to clean energy jobs. Some 90% of oil and gas workers have skills that are relevant to the clean energy transition and government funding is already earmarked for training centres across the country.
Implications for Elon Musk
Elon Musk’s companies, including Tesla and SpaceX, could face mixed impacts. Trump is putting an end to the US government subsidising EV sales by taking away the EV mandate. This could put a dent in Tesla vehicle sales.
Tesla’s ventures in renewable energy storage—like the Megapack battery system—will be going against the grain given the system was launched largely to take on natural gas plants and power renewable projects. For example, the recent collaboration between Tesla and Ørsted in the UK highlights the growing importance of battery storage as a complement to renewable generation. Yet any sights on a future uptick in megapack sales could be dimmed unless smart grids are within Trump’s energy emergency plans. In the meantime, any decrease in investor confidence in US renewables might indirectly affect Tesla’s stock performance and future project financing.
Pension funds and offshore investment risks
Pension funds and sovereign wealth funds heavily invested in offshore wind and solar projects face increased risk. The abrupt policy change in the US may erode investor confidence, particularly if similar shifts occur in other countries. The transition to renewables requires long-term stability to attract capital. Unpredictable policy reversals like these can dissuade future investments and even lead to reduced portfolio valuations for existing projects.
Directly addressing the risks, pensions news site, IPE notes that the unpredictability of US energy policies under the current administration has made institutional investors hesitant. Suggesting stability and long-term commitments are critical for pension funds investing in infrastructure-heavy renewable projects.
Trump’s clean energy stance: a private market play?
While President Trump’s policies have predominantly favoured fossil fuels, there is an argument that his administration could support clean energy—but without public subsidies. By transferring the burden of funding renewables to the private market, Trump may aim to limit government expenditure while still allowing for gradual clean energy adoption. This approach could foster innovation and competition but risks leaving smaller companies and communities behind due to lack of capital.
Trump’s approach to energy policy suggests an aversion to direct government intervention in clean energy but leaves the door open for market-driven solutions. This could redefine the pace and nature of the energy transition.
In an IPE article, Chris Dodwell, head of policy at Impax suggests that renewable energy capacity is growing fast, especially in Europe. Dodwell says, “market forces [are] often a stronger driver of deployment than government ambition; there are 70 countries in which the projects in the pipeline are higher than the official pledges made by the country”.
Widespread implications
The recent executive orders signal a significant pivot in US energy policy, with wide-ranging implications for jobs, corporate strategies, and global investments. Contractors in the US offshore wind sector must adapt to a rapidly changing jobs market, and companies like Tesla need to navigate the complexities of policy-driven market shifts. Meanwhile, pension funds and investors may demand greater policy stability before committing further to clean energy projects.
