In yet another blow to the beleaguered offshore wind industry, the Trump administration said Wednesday it will pay developer Invenergy $765 million to walk away from four U.S. wind leases, including one off the coast of California, and invest instead in geothermal and fossil fuel projects.
Under the agreement, Chicago-based Invenergy will “voluntarily terminate” its lease off the coast of Morro Bay, as well as a lease in the New York Bight and two off the Gulf of Maine, and instead redirect the millions toward natural-gas-fired power plants in Indiana, Wisconsin, Iowa, Kansas and Missouri and geothermal power generation projects in the western U.S., according to the U.S. Department of Energy.
Geothermal technology taps into pockets of heat rising from the center of the earth, which is then used to spin turbines to generate power.
The $765 million represents a partial reimbursement to the companies for what they paid for the leases, which were awarded under the Biden administration. Wind lease areas are stretches of ocean designated by the U.S. government for potential offshore wind development.
It marks the third such announcement from the Trump administration this year. In March, the Interior Department announced a $1 billion deal with the French firm TotalEnergies to abandon its wind leases off the North Carolina and New York coasts. In April, it struck an $885 million deal with Golden State Wind and Bluepoint Wind to end their leases off the coast of California, New Jersey and New York, with both agreeing to instead invest in “reliable conventional energy projects.”
The latest move leaves only three offshore wind leases intact off the coast of California — one off Morro Bay and two off the coast of Humboldt Bay. Last year, the Trump administration also terminated nearly half a billion dollars local officials were planning to use for the offshore wind effort in Humboldt.
The president and his advisers have repeatedly criticized offshore wind as intermittent, unreliable and unsightly. Trump has focused instead on accelerating U.S. fossil fuel production, including a recent $700 million investment in new and existing coal plants and the first-ever coal export terminal on the West Coast in Oakland.
“President Trump is committed to unleashing affordable, reliable American energy for our country’s communities and putting the American people first through common-sense action,” said Interior Secretary Doug Burgum in a statement. “Under President Trump, companies are shifting investment back toward dependable, secure energy infrastructure that can power our economy and lower utility costs.”
Burgum also described offshore wind projects as threats to national security — a notion many experts have dismissed.
But the move continues to undermine California’s offshore wind ambitions. The state has a target of 25 gigawatts of offshore wind power by 2045, and officials say it could play an important role in a diversified energy portfolio along with solar power and battery energy storage.
Invenergy’s California lease area, known as Even Keel Wind, covered about 80,000 acres roughly 20 miles off the coast and was estimated to support 2 gigawatts of offshore wind capacity, enough to power about 1 million homes.
Environmental groups and Democratic lawmakers are likely to challenge the latest agreement after calling into question the legality of the previous deals earlier this year. State officials in California are already investigating the deal with Golden State Wind; the California Energy Commission has subpoenaed details about the payout.
“Donald Trump is using your tax dollars to make America more dependent on dirty, volatile fossil fuels,” said Rep. Jared Huffman (D-San Rafael) on Wednesday. “He is paying energy companies to kill homegrown offshore wind that will put electricity on the grid, lower energy bills, and create good jobs, and he is funneling that money straight back to fossil fuel, leaving families at the mercy of every price spike and global shock. It is hard to imagine a more backwards use of taxpayer money.”
Eddie Ahn, executive director of Brightline Defense, a nonprofit environmental justice and policy advocacy group, said similarly that the deal is “yanking” jobs and investments away from Californians. “California should investigate this second backroom deal to the full extent of the law and demand accountability for this blatant misuse of taxpayer funds,” he said.
Officials with Invenergy — the largest privately held independent power producer in North America — said the agreement was motivated by soaring demand for electricity, which is expected to grow as much as 40% in the next decade driven largely by AI data centers. The company is “focused on delivering reliable, affordable energy for our customers and supporting disciplined investment at scale,” said Daniel Runyan, senior vice president for development.
A source familiar with the company said the decision to walk away from offshore wind is also a reflection of policy and market realities that are inescapable right now. Natural gas and geothermal are both seen as faster ways to meet demand, the source said.
The company is looking to start exploratory drilling for geothermal later this year in the Western U.S., the source said, including potential sites in California, Idaho, Nevada and other states.
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