President Donald Trump's latest executive order has sent shockwaves through the renewable energy sector, as it effectively halts federal leases for offshore wind development on the outer continental shelf. Signed on Monday, the order has sparked concerns that it could kill the nascent offshore wind industry in the United States.

The order specifically states that it does not apply to leasing related to other purposes, such as oil, gas, minerals, and environmental conservation. However, it does direct the Secretary of the Interior to review existing contracts for ways to terminate or amend them. This move has raised eyebrows, as it could potentially stifle the growth of an industry that has been slowly gaining momentum in the US.

Offshore wind has faced significant challenges in the US, with only a handful of operating wind farms in American waters, amounting to a mere 174 megawatts of capacity. This is a tiny fraction of the worldwide total of 68 gigawatts, with the majority of it located in Europe and China. Despite these challenges, the sector had been showing signs of improvement, with 4.1 gigawatts under construction, another 3.4 gigawatts approved, and another 19.8 gigawatts moving through the permitting process.

The Biden Administration had set an ambitious goal of boosting offshore wind capacity to 30 gigawatts by the end of the decade. However, Trump's executive order has cast a shadow of uncertainty over the industry's ability to meet this target. Offshore wind is still more expensive compared to other sources of power, but its relative consistency and proximity to major population centers and data centers have made it an attractive option.

In Europe, data center operators have been keen to sign deals with offshore wind farms. Last year, Google agreed to buy 478 megawatts of offshore wind power to supply two data centers in the Netherlands. However, in the US, offshore wind has been hampered by public resistance and a lack of infrastructure required to build and install the turbines. The availability of cheap, windy land in the interior of the country has also tilted the scales in favor of onshore turbines.

While Trump's executive order won't kill offshore wind entirely, it is likely to slow down the industry's growth in the US. Instead, companies may focus on developing their expertise in other countries where the market is more favorable. This could lead to a brain drain and a loss of opportunities for the US to become a leader in the offshore wind sector.

The long-term implications of this move are still unclear, but one thing is certain – the US offshore wind industry is facing a significant setback. As the world continues to transition towards renewable energy sources, the US risks being left behind in the offshore wind sector. It remains to be seen how the industry will respond to this challenge and whether it will be able to recover from this setback.