German energy company RWE announced it has agreed to relinquish its offshore wind energy leases off New York, California and Louisiana in a settlement with the U.S. Department of Interior to pay RWE $1.22 billion.
It’s the biggest deal the Trump administration has paid to kill offshore wind projects, offering developers an attractive out in the face of the administration’s determined opposition to renewable energy development and its promotion of oil and natural gas sources.
“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 Aug. 6 statement. “The settlement resolves RWE U.S. Offshore’s legal claims and provides $1.22 billion in settlement funds.”
“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.”
RWE’s pullback had been expected since the company’s April 30 annual meeting, when CEO Markus Krebber revealed said the company had halted its U.S. projects.
"In the U.S...we have stopped our offshore activities for the time being," Krebber said then. "We remain cautious given the political developments."
RWE’s surrender follows a Department of Interior legal settlement June 17 that paid developer Invenergy $765 million to give up its four offshore wind energy leases.
The Trump administration has sought aggressively to cancel wind leases arbitrarily. But facing resistance from more established project developers and federal courts, the administration pivoted to a strategy of paying some companies to go away, cutting their losses on projects not yet under construction.
TotalEnergies was the first to leave with a March 23 acceptance of the Interior Department’s proposal to surrender its wind leases, valued at $795 million, in exchange for a commitment to invest more in U.S. oil, gas, and LNG projects.
Environmental groups denounced the folding by RWE.
“So far, the Trump administration has handed out nearly $4 billion in U.S. taxpayer funds to companies to get them to walk away from offshore wind projects – canceling 12 leases that could have provided enough electricity to power 9.3 million homes,” said the National Resources Defense Council.
Another pro-wind power group, the BlueGreen Alliance, launched a webpage tallying and documenting the buyouts.
“To date, the buyouts have totaled $3.9 billion in taxpayer money, abandoned 21.15 GW of energy, and cost the nation at least 57,000 projected jobs,” the group contends.
“The most corrupt, lawless administration in American history is once again flouting the law and attempting to use over $1 billion in taxpayer dollars to kill off clean energy projects slated to create thousands of good jobs and lower electricity bills for Californians,” Huffman said.
“The deals are deeply corrupt and illegal. When the accountability comes, and I promise you accountability is coming, everyone involved in them will answer for it.”
While pulling out of the U.S. offshore wind market, RWE promised to invest more in the U.S. administration’s currently favored energy source natural gas, saying “RWE Americas and its affiliates will “deploy capital across the U.S. to meet rapidly growing energy demand:”
• LNG infrastructure including $900 million to acquire an indirect 16% stake in the Louisiana LNG Project, with RWE proceeds to fund the construction of the terminal.
• Natural gas turbine reservations: “To support the expansion of its growing flexible power generation work in the U.S., RWE Americas has signed a $300 million turbine reservation agreement securing future generating capacity to meet growing U.S. electricity demand. The company is developing a pipeline of 15 natural gas peaking projects across target markets in the U.S.”
RWE plans to invest 17 billion euros in the U.S. over the next six years to grow its generation capacity from approximately 13 GW across 27 states today to 22 GW by 2031. “In 2025 alone, RWE Americas commissioned 2 GW of new power generation capacity in the United States,” the company said.
But meanwhile, “RWE remains focused on growing its offshore activities globally. RWE is one of the world's leading offshore wind developers with 18 offshore wind farms currently in operation, four under construction, and additional projects in development – including 6.9 GW of capacity secured in the UK's most recent offshore wind auction.”
