Lessons for Canada from the U.S. Experience 

In July of 2025, Canada made the much-anticipated announcement on the identification of an offshore wind project area off the coast of Nova Scotia. The Federal and Nova Scotia provincial governments jointly designated five offshore wind project areas and a goal of developing 5 GW of offshore wind energy capacity by 2030. First round auction bids for development rights to these newly designated offshore wind areas are expected to occur sometime before the end of 2025, according to the Canadian Government. 

These projects aim to ensure lasting energy security and economic benefits for Nova Scotians. But wait, hasn’t the offshore wind industry heard this before?  

A quick Google search of the U.S. offshore wind market State RFPs will show that the goals mentioned by Canada of developing energy security and reaping the economic benefits of offshore wind development are nothing new to the market.  

The purpose of this article is to critically analyse the development risks that have emerged in the U.S. market, examine the parallels and uniqueness of development risks in both markets, and offer some insight for developers looking to participate in the Canadian market. 

The Policy of Capturing the Breeze 

For large infrastructure projects like offshore wind, the underlying policy mechanisms that define how projects are permitted, developed, and operated are arguably among the most important factors when entering a new market such as Canada. Clear, stable, and predictable frameworks for permitting, offtake, and intergovernmental coordination are essential to ensuring project bankability and long-term success. Permitting regimes must be streamlined and well-defined across all levels of government: federal, provincial, Indigenous, and municipal, to avoid regulatory delays and conflicting oversight.  

Likewise, offtake mechanisms must be transparent, competitive, and structured in a way that reflects the true cost of delivering offshore wind, without burdening developers with unrelated policy goals. Most critically, the full framework, including transmission, stakeholder consultation, and environmental reviews, must be established up front, not left to evolve mid-process. Uncertainty or shifting requirements midstream can erode investor confidence, increase development risk, and raise costs unnecessarily.  

A well-designed policy structure developed through early engagement with all relevant stakeholders will help avoid costly revisions later and provide the market certainty needed to attract investment and deliver successful projects at scale. 

Avoiding the American Christmas Tree 

In the United States, offtake procurement for offshore wind is administered by states located near lease or project areas. Driven by state legislation and energy needs, these states have conducted multiple large-scale procurements totaling several gigawatts of capacity. While these procurements provide a clear pathway to offtake, it is not without its flaws. 

One recurring issue is the tendency of states to “Christmas tree” their offshore wind RFPs. In political and legal contexts, this term refers to the addition of unrelated or excessive requirements to a process or proposal. In recent U.S. procurements, developers have been required to allocate tens of millions of dollars to in-state initiatives, including supply chain development, education programs, workforce training, and community benefits. While in principle, these investments can provide long-term value to the state and local economy, they also create a paradox. States issue RFPs with extensive non-energy requirements; developers include the cost of meeting those requirements in their bids; and then states reject the bids, citing high prices. 

This contradiction has contributed to stalled projects, increased development risk and upfront costs (DEVEX) for developers, and reinforced a misleading narrative that offshore wind is an order of magnitude more expensive than other forms of generation. In reality, the cited high costs can be attributed to required initiatives that are not directly tied to delivering energy. This approach has slowed market growth and damaged investor confidence. 

The lesson learned from the U.S. market is that offshore wind procurements should remain focused on energy delivery, rather than serving as platforms for broader economic or political agendas. Projects that are free from excessive RFP add-ons are more likely to be economically competitive and still deliver long-term regional benefits. Affordable, clean, and reliable energy provides deep economic value, a value that extends well beyond the scope of any individual procurement cycle. 

As Canada prepares to launch its own offshore wind procurements, there is an opportunity to avoid these pitfalls. Developers should engage early with relevant procurement authorities to help ensure that RFPs strike the right balance between project affordability and any additional economic goals. Clear, consistent expectations that are developed with stakeholder input will be critical to building a successful, investable offshore wind market in Canada. 

Great Project, but where is the Demand? 

One of the most critical development risks lies in the distance between offshore wind generation areas and major electricity load centers. This challenge is especially acute in Canada. For example, the offshore wind project areas proposed off the coast of Nova Scotia lack proximity to any significant demand centers capable of absorbing the full power output of these developments. With Halifax representing only a modest load center, developers must look hundreds of miles inland to cities like Montreal as viable load centers. This would require the construction of more than 500 miles of high-voltage transmission lines along with related infrastructure, which introduces significant challenges regarding permitting, financing, and scheduling. 

A key principle that must guide policy and project planning is that offtake agreements should be focused solely on offshore wind generation. Transmission development, especially large-scale, long-distance infrastructure, should be addressed as a separate process. Bundling the two introduces compounding risks that can delay or even derail projects. 

The central question then becomes: who bears the responsibility for developing this transmission infrastructure? Expecting project developers to also take on the design, permitting, and construction of such large-scale transmission assets adds substantial complexity and cost to already capital-intensive offshore wind projects. Transmission projects are multi-year, multi-billion-dollar undertakings, even in isolation. Layering these challenges onto offshore wind development significantly heightens the risk profile and can render projects financially unviable. This is not a risk unique to Canada; projects in Scotland and anticipated floating wind farms off California face similar obstacles due to their remote locations. 

By treating transmission and generation as distinct but complementary components, both the US and Canada can reduce project risk, attract more investment, and accelerate the build-out of offshore wind capacity. 

Proactive Partner, Not Gate Keeper 

Another key development risk is permitting. Federal, provincial, and local authorities involved in offshore wind should act as partners in enabling responsible development, not gatekeepers to be navigated or overcome. A permitting framework should achieve an appropriate balance between efficiency and thoroughness, ensuring that environmental, technical, and stakeholder evaluations are conducted comprehensively without extending the process over multiple years. Canada has an opportunity to learn from the U.S. experience, where permitting has become a major bottleneck. In many cases, project reviews take five years or more, with requirements that shift from year to year, introducing regulatory uncertainty and eroding investor confidence. 

To avoid similar pitfalls, Canada must establish a permitting process that is expedited, stable, and predictable. That means clear timelines, well-defined jurisdictional roles, and consistent standards from start to finish. Once a project enters the permitting phase, developers need confidence that the rules won’t change midstream. Stability must be built into the process itself. A transparent, time-bound, and coordinated permitting system will reduce development risk, attract capital, and signal that Canada is serious about scaling offshore wind. This approach begins with early and proactive engagement between developers and permitting authorities, ensuring alignment from the outset and building trust across all parties involved. 

 As Canada prepares to launch its first offshore wind projects, the choices made now around policy design, permitting, offtake, and transmission will shape the long-term success of this emerging sector. This article has outlined key development risks, drawn from real challenges in the U.S. market, that Canada has the opportunity to avoid. To mitigate these risks, Canada must establish a clear, stable, and streamlined framework that separates offshore wind generation from transmission development, enables transparent and focused offtake procurement, and treats permitting as a collaborative process and not a regulatory hurdle.  

With early coordination, consistent policies, and a commitment to predictability, Canada can build an offshore wind market that is both investable and impactful.  

Offshore Construction Associates offers comprehensive support for developers and stakeholders navigating complex markets, applying industry insights, and mitigating risks associated with offshore wind development. Our expertise is available to assist with your next project, in Canada or elsewhere.