New blow from the Trump administration for Iberdrola. The Interior Department announced Monday “the suspension, effective immediately, of leasing contracts for all large-scale offshore wind projects under construction in the United States due to national security risks identified by the Department of War in recently classified reports.”
This blockade concerns five projects, according to the US government press release, among which Vineyard Wind I, Iberdrola’s main offshore wind farm in the United States, stands out. This is a project off the coast of Massachusetts, with a total installed capacity of 806 MW, which required an investment of 2.7 billion euros, according to information provided by the company itself.
This is not the first time that Trump has attacked this technology and Iberdrola’s projects. In September of the same year, it demolished the Basque Electric Company’s planned parks, also in Massachusetts. Specifically, the developments called New England Wind 1 and New England Wind 2.
On this occasion, the White House assures that “today’s action responds to emerging national security risks, including (…) vulnerabilities created by large-scale offshore wind projects near population centers on the East Coast. The Trump administration will always prioritize the security of the American people.” “The primary duty of the United States government is to protect the American people,” said Secretary of the Interior Doug Burgum.
The blockade, in addition to Avangrid, the American subsidiary of Iberdrola, concerns four other projects: Revolution Wind, CVOW – Commercial, Sunrise Wind and Empire Wind 1. After the suspension, the companies concerned suffered stock market falls. In the case of Iberdrola, shares fell 0.7%. However, Revolution owner Orsted fell 15%. For its part, the turbine maker Vestas, also Danish, lost 5%.
The Iberdrola project may affect other actors, besides the multinational itself. As the company announced, “In October 2023, the Vineyard Wind 1 project closed the first-of-its-class tax capital package for commercial-scale offshore wind energy with three U.S. banks. The $1.2 billion (over €1 billion) deal was reached with JP Morgan Chase, Bank of America and Wells Fargo, making it the largest financing of its kind and the first for an offshore wind farm.” In the United States, Iberdrola also owns the Vineyard Wind 1 offshore wind farm with 806 megawatts (MW) already under construction, Kitty Hawks – with 2,400 MW in the previous development phase – and Gulf of Maine, also under development, with 3,000 MW.
For the American executive, “unclassified reports from the American government have long established that the movement of the enormous turbine blades and highly reflective towers generates radar interference known as distortion. “This distortion caused by offshore wind projects obscures legitimate moving targets and creates false targets near the projects.”
Strategic shift
This setback comes amid a change in strategic direction for Iberdrola in the United States, which, after the first blockade in September, reaffirmed its commitment to the American giant. By updating its strategic plan for the coming years, the energy company led by Ignacio Sánchez Galán is prioritizing investments in networks rather than renewable energy, unlike what it has done in recent years.
The rise of the far right has also led to a regression in terms of the fight against climate change. And the development of these technologies faces problems from governments like that of Donald Trump, who, before returning to the White House, led a strong campaign against clean energy and in favor of fossil fuels.
In this context, Iberdrola prefers to focus on investments in networks, but remains very focused on the United States. It plans to invest 50 billion euros until 2028. Of this amount, 37 billion will be allocated to this concept, well above the 21 billion planned in previous plans. By geography, investment in the UK is forecast at 35%. 30% will go to the United States, while in Spain and Portugal they remain half: 15%. These projects are already taking shape. That same month of December, Iberdrola announced a record investment plan in networks of 14 billion euros.
Unlike the United States, Iberdrola has decided to settle down in other countries where the political situation is a source of problems. This was the case in Mexico, where the electricity company had assets valued at 10 billion euros. However, after clashes with the government of Andrés Manuel López Obrador, he decided to sell it in two phases. It first divested from its gas combined cycles, valued at 6 billion euros, and announced this summer the sale of the rest of the assets, mainly renewable, which it sold to the also Spanish company Cox, for almost 4 billion euros.
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