The Trump administration will pay German energy company RWE $1.22 billion to forgo plans to build offshore wind farms near the coasts of New York, California, and Louisiana, marking the fifth such settlement this year aimed at halting offshore wind development in U.S. federal waters. This move aligns with the administration’s longstanding opposition to offshore wind energy.
Under the agreement, RWE will relinquish three federal offshore wind leases it held, all of which were in early development stages and unlikely to advance under the current administration’s halt on permitting for new offshore wind projects. In return, the government will reimburse RWE approximately the amount the company initially paid to secure the leases. The settlement also resolves outstanding legal disputes related to these leases.
RWE stated that after evaluating the regulatory landscape, it concluded there was no viable path to approve these offshore wind projects in the foreseeable future. The company emphasized that the deal allows it to shift focus and resources toward energy projects with more certain prospects.
As part of its pivot, RWE committed to investing roughly $900 million to acquire a 16 percent indirect stake in a liquefied natural gas (LNG) project in Louisiana and placing a $300 million order for new natural gas turbines. The company plans to construct at least 15 natural gas peaking plants across the United States.
This latest settlement mirrors similar agreements the Trump administration has negotiated with other energy developers like TotalEnergies and Invenergy. Since March, roughly $3.9 billion in federal funds have been spent on compensating companies that relinquished a total of 12 offshore wind leases across several states, including California, Maine, New Jersey, New York, and North Carolina, with the agreement that they would reallocate investments toward fossil fuel projects instead.
Interior Secretary Doug Burgum defended the policy, stating it supports “an energy system built on common sense” by encouraging projects that bolster energy security without reliance on costly subsidies or technologies perceived as unable to meet current demand.
However, the deals have drawn sharp criticism from Democrats. Senate Minority Leader Chuck Schumer of New York condemned the administration for spending billions on canceling renewable energy projects amid rising energy costs. He highlighted that offshore wind offers substantial potential for clean energy production with lower emissions compared to fossil fuels.
Despite this, offshore wind development has faced significant federal obstacles under the Trump administration. Last year, the Interior Department ordered halts on five East Coast wind farms under construction, but federal courts overturned those actions. Additionally, Pentagon concerns have delayed approvals of certain onshore wind farm projects.
The government’s strategy to cancel leases through financial settlements emerged after judicial setbacks to earlier stop-work orders. These agreements represent an unusual use of taxpayer funds, provoking lawsuits from seven states led by Democrats, including New York and California, challenging the cancellations and the federal government’s approach.
RWE, a leading global renewable energy developer with 18 offshore wind farms primarily in Europe and additional projects underway, paused its U.S. offshore wind expansion plans shortly after the 2024 election. Its U.S. subsidiary, RWE Americas, remains active in onshore wind, solar, battery storage, and natural gas power projects.