German energy developer RWE has agreed to cancel three offshore wind leases it holds in United States waters after striking a $1.22 billion agreement with the Trump administration to reinvest funds in fossil fuel infrastructure.
With this new deal, the Trump administration is spending nearly $4 billion to stifle wind energy development, delivering on President Donald Trump’s campaign promise to prevent any new wind farms from being built during his second presidency — at least offshore.
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The RWE agreement is the fifth deal the administration has struck so far to cancel existing offshore wind leases in exchange for investing in natural gas.
RWE stopped its activities on offshore wind in the U.S. last year, in light of the administration’s crackdown on renewable energy projects.
Now, it is abandoning some projects altogether.
The energy company, which is one of the largest offshore wind developers in the world, said on Thursday that it reached a “settlement” with the Department of the Interior and is relinquishing its offshore wind leases off the coasts of New York, California, and Louisiana.
“After careful consideration, it was determined there is no path forward to permit these projects in the U.S. for the foreseeable future,” the company said.
RWE is receiving $1.22 billion in settlement funds from the government, which will be redirected to natural gas projects. Around $900 million will go toward acquiring an indirect 16% stake in the Louisiana LNG Project, helping fund the construction of the liquefied natural gas export terminal.
RWE also plans to dedicate $300 million to reserve natural gas turbines and to develop a pipeline of 15 natural gas peaking projects across the country, which are power plants meant to generate electricity during high-demand times and are used intermittently.
The projects abandoned by RWE on Thursday were in the very early stages of development and would likely not have started generating power until the 2030s.
The deal brings the total amount spent by the Trump administration to cancel offshore wind leases to $3.92 billion. The administration has been using these effective buyout agreements since March, after federal courts dealt setbacks to its anti-wind power agenda.
Under the terms of some of the deals, companies, such as TotalEnergies, have agreed not to pursue any new offshore wind projects in the U.S.
The deals have come under scrutiny from Democrat-led states, which were poised to benefit from some of the projects.
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In June, a coalition of seven blue states said they were suing the Trump administration over the original agreement struck with TotalEnergies in March.
They claimed the payouts amount to an illegal payoff, violating the Outer Continental Shelf Lands Act. They also claimed the Interior Department violated the law by failing to hold a hearing to find that the lease would likely cause serious harm to life, property, national security, or the environment before canceling it.
