The Trump administration will pay the German energy firm RWE $1.22 billion to abandon plans to build wind farms off the coasts of New York, California and Louisiana, the company announced on Thursday.
It was the fifth such deal the government has reached this year to halt the development of offshore wind, a source of renewable energy that President Trump has derided for decades.
Under the agreement, RWE will voluntarily surrender three leases it owned for wind farms in federal waters. Those projects were in the early stages of development and had little chance of moving forward under the Trump administration, which has halted all federal permitting for offshore wind.
The government would reimburse RWE roughly what the company had paid for the leases under the Biden administration. The settlement would also resolve any legal disputes over the leases, the company said. The company will invest about the same amount in new natural gas projects in the United States, it said.
“After careful consideration, it was determined there is no path forward to permit these projects in the U.S. for the foreseeable future,” RWE said in a statement, referring to the offshore wind leases. “The company determined that this resolution best serves the interests of its stakeholders and allows it to direct resources toward energy projects that can be advanced with certainty.”
The firm will spend $900 million to acquire an indirect 16 percent stake in a liquefied natural gas project in Louisiana and sign a $300 million order for new gas turbines that generate electricity. The company said it was planning to build at least 15 natural gas peaking plants in the United States.
The agreement is similar to deals that the Trump administration has struck since March with other energy developers, including TotalEnergies and Invenergy, to refund wind leases off California, Maine, New Jersey, New York and North Carolina in exchange for investing in fossil fuel projects instead.
Including Thursday’s announcement, the government has so far spent roughly $3.9 billion to get companies to terminate 12 offshore wind leases.
“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,” Interior Secretary Doug Burgum said in a statement. “We welcome RWE’s agreement and voluntary investment in projects that strengthen our nation’s energy security.”
Democrats denounced the deal.
“New Yorkers are suffering from sky-high energy costs, and Trump’s answer is to spend almost $4 billion of taxpayer money killing twelve offshore wind power leases that would have provided unlimited clean energy once online,” Senator Chuck Schumer of New York, the minority leader, said.
Wind power generates far fewer planet-warming emissions than burning fossil fuels, and many states had been developing offshore wind farms to help meet their goals for tackling climate change. Yet Mr. Trump has called the technology ugly and costly and has sought to block new wind turbines. Last year, the Interior Department ordered work to stop on five wind farms already under construction off the East Coast, but federal judges struck down all of those moves. The Pentagon has also stalled approvals of wind farms on land.
The agreements with companies to forfeit their offshore leases are a new strategy, which the government turned to after losing court cases over the stop-work orders. The deals are a highly unusual use of taxpayer dollars. Seven Democratic-controlled states, including New York, have sued the Trump administration over the Interior Department’s deal with TotalEnergies. California has also sent a notice of intent to sue over a deal the Trump administration struck to cancel a wind farm off the state’s Central Coast.
RWE is one of the world’s largest renewable energy developers, and it currently has 18 offshore wind farms in operation, mainly in Europe, with more under construction. Shortly after Mr. Trump won the 2024 election, RWE’s chief executive said he was placing plans to expand offshore wind development in the United States on hold.
The company’s U.S. subsidiary, RWE Americas, is also a major developer of onshore wind, solar power, batteries in the United States, as well as some gas power.
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