The Trump administration is spending nearly $800 million to cancel offshore leases for four wind farms along the Atlantic and Pacific coasts, repaying the project developer in exchange for investments in fossil fuels.
This is the third time this year that the Interior Department has moved to reimburse wind developers for what they previously paid for the offshore leases. This creative strategy to stifle the wind energy industry follows the administration’s failed effort to block the construction of wind farms over national security concerns.
Recommended Stories
The department confirmed on Wednesday that it struck a settlement agreement with affiliates of Invenergy to terminate four offshore wind leases in the New York Bight, the Central Coast of California, and the Gulf of Maine.
The agreement involves paying the Invenergy affiliates $765 million, which will be redirected to investments in fossil fuels, including the development of natural gas-fired power plants in Indiana, Wisconsin, Iowa, Kansas, and Missouri. It will also go toward geothermal projects in the western U.S, the Interior Department said.
Unlike the previous buyout agreements announced by the agency this year, Wednesday’s settlement is only a partial reimbursement of what the companies spent on the offshore wind leases.
“The offshore wind leases were sold under the assumptions that taxpayers would indefinitely subsidize costly, unreliable projects and that no national security concerns were implicated – both assumptions have since been proven false,” Interior Secretary Doug Burgum said. “Under President Trump, companies are shifting investment back toward dependable, secure energy infrastructure that can power our economy and lower utility costs.”
The Interior Department has struck similar agreements with Bluepoint Wind and Golden State Wind for projects off New York, New Jersey, and California, as well as TotalEnergies for projects off the coasts of New York and North Carolina.
Between these three separate deals announced so far, the department has agreed to pay more than $1.8 billion to the wind energy developers to abandon their projects.
In the previously announced agreements, the developers agreed not to pursue future offshore wind developments in the U.S.
Invenergy, however, does not appear to have made such a promise.
DEMOCRATIC STATES SUE TRUMP ADMINISTRATION OVER CANCELLATION OF NEW YORK OFFSHORE WIND LEASES
A person familiar with the matter told the Financial Times that the company is not ruling out investments in offshore wind.
At least seven states have sued the Trump administration over the first deal made in March, claiming the administration’s payments amounted to an illegal payoff.
