Trump administration pays RWE $1.22bn to abandon offshore wind leases

The German energy company RWE has agreed to relinquish its offshore wind leases off the coasts of New York, California and Louisiana in exchange for $1.22bn from the US government, redirecting funds toward fossil fuel investments. The deal, announced on Thursday with the US interior department, is the largest so far in a series of agreements by the Trump administration to end offshore wind projects.

According to RWE, the settlement resolves its legal claims and allows the company to focus on projects that can move forward with certainty. RWE had paid $1.1bn for its New York lease in a 2022 auction under Joe Biden, while its Louisiana and California leases cost a combined $163m.

As part of the agreement, RWE will spend $900m to acquire a 16% stake in an unnamed Louisiana liquefied natural gas (LNG) project and has signed a $300m turbine reservation agreement for a pipeline of 15 natural gas peaker plants across the country. Interior Secretary Doug Burgum welcomed the deal, saying it strengthens energy security and keeps electricity affordable.

The payout brings the total taxpayer money spent on killing offshore wind projects to nearly $4bn, including previous deals with TotalEnergies and Duke Energy totaling $2.7bn. After the $928m deal with TotalEnergies, seven states sued the administration over what New York Attorney General Letitia James called a "sham deal" and "illegal agreement".

The administration has also spent up to $1.1bn to boost coal, while seeking to shorten public input periods for fossil fuel drilling and shift cleanup costs to taxpayers. A report by the Environmental Integrity Project found that every fully operational LNG facility in the US had violated federal pollution limits, discharging bacteria, zinc, oil and other pollutants into waterways.