What Funding Losses Could Mean for Offshore Wind Developments in Humboldt Bay, California

Written by: Tessy Schreyer

Edited by: Ashley Yeung

California's beautiful coastline is host to a slew of economic activities: everything from tourism and recreation to oil drilling, fishing, and ship construction (Morgan, 2025). A pressing question today is whether or not offshore wind production will be added to this list. In 2022, the Bureau of Ocean Energy Management (BOEM) granted leases for the first-ever offshore wind farms to be constructed off California's coast. One of these is to be built off a northern region called Humboldt Bay. The area is full of biodiversity as well as local communities that have historically been involved with and affected by several types of natural resource industries (Service, n.d.). Although it is not a resource extraction industry, offshore wind in Humboldt Bay will require industrial complexes to be built. This may entail large alterations to the physical landscape and significantly affect the livelihoods of those living around them.

The first offshore wind farms were commissioned in Denmark in 1991, with several countries gradually following suit (Yeilding et al., 2022). The United States was not first to join the pack, but its earliest wind farms came online from the coast of Rhode Island in 2016 (Fehrenbacher, 2016). Because of its novelty, offshore wind is still earning its place in the renewables industry. Onshore windmills have been the status quo in the wind energy industry, and as of 2023, they made up around 93% of the industry’s production, while offshore only accounted for 3% (IEA, 2023). Despite its young roots, offshore wind is able to exploit the higher-speed and more consistent winds of the open ocean, and the space allows for larger turbines capable of generating greater quantities of energy at a lower cost (Yeilding et al., 2022). These turbines float above or stand upon the sea floor and are able to connect to the energy grid with undersea cables, sending energy to local grids to be harnessed for export.

Since its introduction, the economic feasibility of offshore wind continues to prove itself. Installment, operational, and upkeep technologies are improving, and a growing number of countries are moving to accept the offshore method on vast scales and with astounding speed; from 2022 to 2023, newly built offshore wind capacity increased by 24% around the world (Alexandrou, 2025). As of 2025, most offshore wind farms are located in Europe, the UK, and China (Yeilding et al., 2022). The U.S., on the other hand, remains uncertain about its beginnings in the industry. As the federal government's values have shifted with changing administrations, so have the policies targeting offshore wind. Offshore wind in the U.S. was projected to grow in the coming years – with projects like Humboldt Bay – through the support of state, local, private, and federal institutions (U.S. Department of Energy, 2023). The federal government can significantly impact the adoption of the technology by providing funding and legislation that reduce the risks for suppliers of diving into the industry. As demonstrated in the case of Humboldt Bay, the federal government can either boost or hinder a project depending on which way a president's administration swings.

In Humboldt Bay, a port development project received an impressive grant from President Joe Biden's administration, in line with Biden's goal of generating “30 gigawatts (GW) of offshore wind in the United States by 2030” (U.S. Department of the Interior, 2023). This grand total of $426,719,810 that was awarded to Humboldt Bay has since been withdrawn by the Trump administration as of August 2025. As Trump has made his opposition to wind energy clear, eleven other grants nationwide were canceled in the same action by the U.S. Department of Transportation (USDOT) (U.S. Department of Transportation, 2025). Trump's administration has also annulled the U.S. net-zero target set by the Biden Administration, and has not voiced intent to meet a reduced emissions target (Climate Action Tracker 2025). As the Trump Administration diverts funds from wind energy, projects, including the one at Humboldt Bay, face new challenges. Moving forward, the United States will have to grapple with the lost employment opportunities and drastic environmental consequences of shifting away from developing renewables in a time of climate crisis.

Although development faces uncertainty at Humboldt Bay due to the grant cancellation, the project has been in the works since before the Biden administration provided monetary support. The state of California advances its own interests in carbon neutrality involving developments for offshore wind. Offshore wind planning in California began with interactions between the state and locals in the north when, after an information session was held by the California Energy Commission (CEC) in 2016, “tribal representatives expressed strong interest in gaining more information about potential economic benefits related to offshore wind” (Environmental Protection Information Center, et al., 2024). The following year, the State of California established a “State Tribal Offshore Renewable Energy Working Group” in partnership with BOEM to consult with Indigenous groups in the area about potential offshore wind projects. From 2017 onwards, the CEC and BOEM worked on finding an optimal location for offshore wind turbines and advocating for their construction. It was not until 2022, when BOEM published a federally-required Final Environmental Assessment that found no significant harm from an offshore wind project, that leases for ocean parcels to construct the turbines were auctioned off. That December, two leases were sold to Danish and German companies for over $150 million each. In 2023, these leaseholders entered the “Site Assessment & Surveys” phase overseen by BOEM, which includes conducting analyses for an Environmental Impact Statement (EIS) (Environmental Protection Information Center, et al., 2024). An EIS discloses the process by which a project was developed, explores any valid alternatives to the project, and presents efforts to comply with environmental regulations (Middleton, 2021). The EIS was to be completed by the end of 2024, followed by the lessees' submissions to the Construction and Operations Plan (COP), to be reviewed for a year by BOEM. The most recently released goals share that the plan is to complete environmental reviews by 2025 and begin construction in 2026 (Environmental Protection Information Center, et al., 2024).

Planning to make the project compliant with environmental regulations as well as ensuring it is economically and socially viable has taken nearly a decade. Thorough investigations on how the project might impact the local economy, environment, and Indigenous peoples in the area had already been accomplished prior to 2024, when Humboldt Bay received Biden's grant from the USDOT. Because Humboldt Bay has yet to begin construction, and the project has completed several crucial steps in the planning process, such as selling leases to developers, Trump's grant cancellation and other new limits to BOEM’s ability to encourage wind developments are somewhat less pressing. The grant was to be dedicated to numerous integral parts of the project, allocating $426 million for the construction of access roads, a wharf and berth, and other necessary infrastructures. It also included $51 million for “environmental restoration,” $10 million for “a large on-site solar array to provide renewable energy to the project operations,” $6 million for a “Community Benefit Program intended to benefit local Tribes, fishermen, and nearby residents,” and over one million dollars to “public recreation access” for activities such as fishing and kayaking (HBHD, 2024). These funds not only significantly reduce the monetary costs of construction, but they also help such a project gain local acceptance by reducing environmental destruction and social costs to local communities while bringing economic benefits. Humboldt Bay offshore wind developers have shared the aspiration to produce offshore wind in California by 2030; however, with the grant cancellation, this timeline could end up delayed (Environmental Protection Information Center, et al., 2024).

After immense spending on baseline and environmental assessments, as well as significant amounts of time invested by all involved parties to create an outcome for this project, Humboldt Bay faces a huge financial loss. The stakeholders that have contributed to or are affected by the project are not entirely united in their support for its continuation, however, those who are committed will have to confront this setback in order to push forth in a time of uncertainty. Because the project is still in the planning phase, with leases secured and initial environmental assessments completed, Humboldt Bay has a moment to reorganize and potentially adapt to funding cuts. When planning such a complex project, political and economic shocks are to be expected, and can be worked around. Yet, overcoming such a shock rests in the hands of stakeholders and officials, who must persevere in keeping the project alive – until they find another source of funding or a future administration reinstates funds – to ensure Humboldt Bay is able to start construction.

References

Alexandrou, D. (2025, January 23). Strong 2023 offshore wind growth as industry sets course for record-breaking decade . Homepage. https://www.gwec.net/gwec-news/strong-2023-offshore-wind-growth

Biden-Harris Administration Releases Roadmap to Accelerate Offshore Wind Transmission and Improve Grid Resilience and Reliability. (2023, September 19). U.S. Department of the Interior. Retrieved October 26, 2025, from https://www.doi.gov/pressreleases/biden-harris-administration-releases-roadmap-accelerate-offshore-wind-transmission-and#:~:text=Together%2C%20these%20activities%20will%20advance,pathway%20to%20110%20GW%20or.

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Middleton, T. (2021, March 2). What is an Environmental Impact Statement?. American Bar Association. https://www.americanbar.org/groups/public_education/publications/teaching-legal-docs/teaching-legal-docs--what-is-an-environmental-impact-statement-/

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Service, P. (n.d.). A Brief History of Humboldt County. Humboldt County Historical Society. https://www.humboldthistory.org/a-brief-history

U.S. Department of Transportation. (2025, August 29). Trump’s Transportation secretary Sean P. Duffy terminates and withdraws $679 million from Doomed Offshore Wind Projects | US department of transportation. https://www.transportation.gov/briefing-room/trumps-transportation-secretary-sean-p-duffy-terminates-and-withdraws-679-million

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