The clean energy industry has learned the hard way that having the law on your side doesn’t always mean you win.
Since taking office for his second term, President Donald Trump has attempted to delay or cancel dozens of wind and solar projects. These initiatives had all undergone extensive, multi-year reviews to secure federal approval, yet the Department of the Interior and other agencies have systematically frozen their permits. The justifications provided have often relied on vague "national security" arguments or have been issued with no explanation at all. These regulatory attacks have all but tanked the offshore wind industry in the United States and have led many developers to take financial payouts from the administration rather than fight indefinitely for permits in federal court.
This ongoing political and legal assault is one of the primary reasons why major solar and wind companies have thrown their support behind efforts in Congress to negotiate a bipartisan "permitting reform" bill. A bipartisan group of senators reached a compromise earlier this month on comprehensive legislation they call the Bipartisan American Affordability and Jobs Act (BAAJA). While lawmakers won’t vote on the package until after the midterm elections, the renewable energy sector has hailed the compromise as a crucial win for long-term stability. The bill would speed up environmental reviews for a wide array of energy projects, ranging from high-voltage transmission wires to traditional oil and gas pipelines. Crucially, it also contains a number of provisions specifically designed to deter current and future presidents from blocking clean energy development. Reports indicate that President Trump told aides just before the compromise became public that he would ease up on wind projects in order to reach a deal.
However, cracks are already emerging in the tentative agreement. While the renewable energy industry has remained steadfast in its support of the bill, a number of energy policy experts and key climate advocates are arguing that the legislation’s "project certainty" provisions would do little to prevent Trump or another executive from arbitrarily blocking solar farms and offshore wind turbines. The Trump administration itself threatened the compromise bill this week when it announced that it would review three separate permits for wind farms off the Atlantic Coast, including one high-profile project that is already up, running, and delivering power.
"The administration’s action against [the wind projects] just further demonstrates the lengths they will go to to obstruct clean energy progress, especially offshore wind," said Elizabeth Klein, who led the Bureau of Ocean Energy Management, which oversees offshore wind permits, under former president Joe Biden.
The project certainty portion of the Senate bill has two key parts. First, it declares that the federal government "shall not take any new action that would revoke, rescind, withdraw, terminate, suspend, amend, or alter" a project that has already received a valid federal permit. This language is largely a forceful restatement of the existing legal status quo, since permits that are legally issued are not supposed to be canceled arbitrarily or without cause. But the bill goes a step further by offering companies two main remedies if the federal government does take such prohibited actions.
One remedy is the formal reinstatement of the permit, which critics note is somewhat redundant. Federal judges have already shot down the Trump administration’s past attempts to halt wind projects, yet the administration continues to seek ways to revoke those same permits. If the bill passes, all the courts would be able to do is order the administration in even stronger terms to restore the permits.
The other remedy is a cash payout. The courts would be able to order the federal government to refund a project developer between 25 and 50 percent of the total costs of their project. For a massive offshore wind farm, these costs can reach well into the billions of dollars. The money for these settlements would come from the Judgment Fund, a specialized bank account that the federal government uses to pay out legal settlements. This fund typically disburses around $2 billion in settlements per year, and successful claims under the proposed permitting bill could lead to a dramatic spike in payouts.
The other key component of project certainty in the bill is an anti-discrimination clause that would ban "disparate treatment" of any particular energy source, whether it is solar panels or coal plants. If a wind developer found compelling evidence that the government denied them permits as part of a broader anti-wind pattern, they could present that evidence to a judge. If persuaded, the judge would then order the government to restore the permit and pay the developer the entire construction cost of the wind farm, though that specific remedy would only apply if the developer finished building the facility.
Supporters of the bill argue that the promise of financial relief would help lure skittish investors back to the renewable energy industry, which has been thrown into turmoil under Trump. This is most important for the offshore wind sector. Major international energy companies like Ørsted and Equinor spent billions of dollars to build massive wind farms in the Atlantic during the Biden administration, but their costs ballooned after the pandemic snarled global supply chains and President Trump subsequently tried to dismantle their existing projects. These companies now view the United States as largely uninvestable, even as Northeastern states still need a massive expansion of offshore wind generation in order to meet their mandatory state climate goals.
The cash payout provision is designed to help make the U.S. market seem like a less risky place to invest long-term capital. The American Clean Power Association, a prominent trade group representing wind and solar developers, said in its official analysis of the bill that "greater certainty lowers financing risk before construction and reduces the chance that years of development and investment will be stranded by a later policy reversal."
While the promise of reimbursement from the federal government would be welcome news for corporate investors, it remains unclear whether it would actually lead to more clean energy getting built on the ground. Opponents of the permitting reform bill point out that the Trump administration has already been paying to stop renewable power plants from being built, albeit on a smaller, more localized scale. The president has worked out several deals to buy back offshore wind leases from energy developers in exchange for those developers committing to build a fossil fuel project elsewhere instead. These arrangements are currently being challenged in court, but in the meantime, they function as direct repayments for leases that Trump originally intended to block.
"The project certainty provisions are unlikely to deter the Trump Administration from continuing to mess with clean energy permits, since this administration has shown an eagerness to use the public’s money to advance its own policy goals," said Matthew Littleton, a former attorney at the U.S. Department of Justice who worked extensively on environmental law issues.
Littleton also points out that the anti-discrimination provision may not work as intended due to how it calculates baselines. The baseline for calculating "disparate treatment" is the average pace of project approvals over the most recent five-year period. By the time Trump leaves office, he will have spent four full years fast-tracking oil and gas projects while delaying or rejecting almost all major solar and wind efforts. This skewed baseline would effectively prevent wind developers from successfully making a discrimination claim, while ironically also protecting future administrations from walking back support for new oil and gas developments.
As if to highlight these underlying risks, the White House stated in court filings over the past week that it is seeking to rescind permits for three separate offshore wind projects along the Atlantic Coast. One of these projects, the 700-megawatt Revolution Wind farm, is already complete and actively delivering power to the grid in Rhode Island, while the other two projects are still in the early stages of development. In each court filing, the government has said only that it seeks to "reevaluate … compliance" with federal environmental and administrative law.
Over the past year, Democratic negotiators in the Senate have repeatedly warned that this sort of aggressive administrative behavior would jeopardize any potential bipartisan deal. Senator Sheldon Whitehouse, a Democrat from Rhode Island and one of the primary authors of the bill, said in the spring that he would not endorse a compromise package unless the administration stopped blocking wind farms. However, this week he appeared to change tack, describing the move against Revolution Wind as yet another reason to pass the legislation.
"Frankly, we need to get permitting certainty in law, and this proves it," he said in a statement.
The bill would indeed offer financial protection to a major company like Ørsted, ensuring that a president could not wreck billions of dollars worth of private investment with no clear justification at all. The central question remains whether it could successfully end the government’s prejudicial assault against offshore wind and other renewables. The answer to that question could ultimately determine how millions of people in the Northeast keep their lights on and heat their homes, and right now, the outcome remains entirely up in the air.