Dive Brief:
- The U.S. Department of Commerce has opened a probe into “the effects on the national security of imports of wind turbines and their parts and components,” the agency said in a notice Thursday.
- The investigation began Aug. 13 under section 232 of the Trade Expansion Act of 1962, which allows the president to restrict imports on national security grounds. The department will accept public comment on the case for 15 days after it appears in the Federal Register, which is scheduled for Monday.
- Capstone analysts said in a note that they expect the Commerce Department to expedite the investigation and apply tariffs “likely around 25%-50%, consistent with other Section 232 duties imposed by this administration.”
Dive Insight:
The analysts said they expect tariffs to materially raise the cost of construction, estimating that a 10% increase in the input costs of an onshore wind project would raise its levelized cost of energy by 4%.
The U.S. imported wind components worth $2.83 billion last year, with Germany as the single largest source of imports, followed by Mexico, France and India, according to Capstone. The analysis noted that many wind components have also been hit by steel and aluminum tariffs.
The probe represents the latest escalation in President Donald Trump’s campaign against wind-powered electricity generation. In addition to successfully repealing most clean energy tax credits in the Republican domestic policy bill earlier this summer, the administration has also revoked permits for wind farms and rescinded designated offshore “wind energy areas” on the U.S. Outer Continental Shelf.
Just this week, Trump wrote in a post on social media that his administration “will not approve” wind or solar projects.
Utilities and developers with wind projects were facing rising costs even before the probe was announced.
Dominion Energy’s CEO said he expected the cost of the utility’s 2.6-GW Coastal Virginia Offshore Wind project to rise by about $506 million due to tariffs during an earnings call earlier this month. Despite the heftier price tag, the project was still on schedule for completion by the end of 2026. Once completed, Coastal Virginia Offshore Wind would be the largest capacity wind-powered generator in the country.
Representatives for Dominion did not immediately respond to a request for comment on the probe announced Thursday.
The Commerce Department said in the notice it is particularly interested in comments related to the concentration of U.S. imports of wind turbines “from a small number of suppliers or foreign nations and the associated risks,” the impact of “foreign government subsidies and predatory trade practices,” and “the potential for foreign control or exploitation of the wind turbine supply chain.”
