DOE cancels $7.56B in energy projects, largely in blue states

An article from

Dive Brief:

• The Department of Energy terminated 321 financial awards worth about $7.56 billion after a review determined the projects failed to meet economic or national energy standards, according to an Oct. 2 release.
• The DOE said the decision, which affects 223 projects, followed a case-by-case review of awards issued under clean energy and manufacturing, many of which were approved in the final months of the Biden administration.
• Democratic leaders in Congress blasted the move as politically motivated, noting the terminations affected 108 Democratic districts versus 28 Republican House districts, and could likely raise energy prices.

Dive Insight:

The cancellations signal heightened scrutiny of federally-backed energy projects and create another layer of risk for contractors in the space.

The terminations stem from a May DOE policy that tightened financial review standards across several program offices, including the Offices of Clean Energy Demonstrations, Energy Efficiency and Renewable Energy, Grid Deployment, Manufacturing and Energy Supply Chains, Advanced Research Projects Agency-Energy and Fossil Energy, according to the release. 

The agency concluded the shuttered projects “did not adequately advance the nation’s energy needs and would not provide a positive return on investment of taxpayer dollars,” according to the release.

Recipients have 30 days to appeal the termination decisions.

The policy shift piles on more uncertainty for contractors engaged in federally supported clean energy work. For example, in April, the Trump administration ordered construction halted on Equinor’s 810-MW Empire Wind 1 project offshore New York. The stoppage cost an estimated $50 million per week before the order was lifted in early October.

Similarly, Ørsted’s 700-megawatt Revolution Wind project in offshore Rhode Island secured a court injunction in September to restart work after a separate stop-work order.

Those stoppages, combined with the ongoing government shutdown, have left contractors uncertain about future projects. The full list of the latest DOE-terminated projects can be found here.