RWE Gets $1.2 Billion to Drop Offshore Wind Leases

An offshore wind developer said Thursday it has reached a $1.2 billion deal with the Trump administration to abandon projects under development off New York, California and Louisiana.

RWE U.S. Offshore said its leases represented years of planning, investment and partnership with federal agencies, but that it had determined there was no path forward to permit the projects for the foreseeable future. In exchange for $1.22 billion, the company is relinquishing the leases.

RWE said it is investing $900 million in a liquefied natural gas project in Louisiana and $300 million in natural gas turbines. The company is developing 15 natural gas peaking projects across the United States.

The agreement brings the total spent on such deals to roughly $3.9 billion. The administration adopted the buyback strategy after federal courts thwarted President Donald Trump's efforts to halt offshore wind development through executive action. Trump, who frequently describes his dislike of wind power, has said his goal is to not let any "windmills" be built. Offshore wind generates electricity without emissions; oil, coal and natural gas release carbon pollution when burned.

Interior Secretary Doug Burgum said Americans "deserve an energy system built on common sense, not one dependent on costly subsidies or technologies that can't meet our country's current demand." He said he welcomed RWE's agreement and its voluntary investment in projects that strengthen energy security, provide dependable baseload power and help keep electricity affordable.

Sen. Sheldon Whitehouse, D-R.I., said the buybacks effectively pay companies to walk away from clean energy that could displace more expensive fossil fuel plants, raising costs for consumers.

"They are creating this enormous money pump, pulling billions of dollars out of consumers' pockets," he said. "That's the real story of what is going on here. And that is both a cost story because of the billions in extra costs consumers pay, and it's a corruption story because it's Trump's sneaky way of getting regular families to pay off his big fossil fuel donors."

Under the first deal, announced in March, France's TotalEnergies is receiving nearly $1 billion — essentially a refund on two offshore wind leases — on the condition it invests the money in fossil fuels. Golden State Wind and Bluepoint Wind agreed in April to end their leases for reimbursements totaling nearly $900 million, with equal investment in fossil fuels required. Chicago-based Invenergy agreed in June to give up four early-stage leases for $765 million.

States losing offshore wind projects are suing. California intends to sue.