RWE and the Trump administration agree to cancel offshore wind leases for $1.22 billion
German energy company, RWE, announced on Thursday it had reached an agreement with the Trump administration for a total of $1.22 billion to cancel offshore wind leases within U.S. waterways and direct the money to LNG and gas power plants.
This is the fifth and largest agreement that the Trump administration has made in the last year to stop the development of offshore wind projects in the United States, which President Donald Trump views as expensive and ugly. His administration has increased domestic fossil fuel production, and scrapped policies to support clean energy development.
Interior Secretary Doug Burgum said in a press release welcoming RWE's deal that "Americans deserve an energy system based on common sense and not on expensive subsidies or technologies which can't meet the country's demand."
RWE, a leading offshore wind developer in the world, halted work on its U.S. project last year because of the efforts by the administration to?thwart this industry. This included multiple orders to freeze the construction of multi-billion dollar projects.
RWE has three offshore wind leases off the coasts New York, Louisiana and California in U.S. water. The projects associated with the leases were in their very early stages and would have not been online until 2030.
The company stated in a press release that "after careful consideration, we determined there was no way forward for these projects to be permitted in the U.S. in the near future." The company decided that this decision best served the interests of all its stakeholders, and allowed it to focus resources on energy projects which can be progressed with certainty.
RWE paid $1.1billion for its lease of the New York coast at an auction that was held by the Biden Administration in 2022. The remaining leases cost $163 million.
The company announced that it would invest $900 million in order to purchase a 16.6% stake in the Louisiana LNG project. The company also placed a $300-million turbine order to power its 15 natural gas peaker plant pipelines across the U.S. The company didn't disclose who owned the LNG project or which turbine manufacturer. Woodside Energy Group, based in Australia, is building a Louisiana LNG terminal.
Chuck Schumer, top Senate Democrat and critic of the Republican administration, has criticised this move.
Trump is spending billions of taxpayer dollars to limit the U.S. Schumer, in a blog post on X, wrote that Trump is spending billions of taxpayer dollars to limit the?U.S. This will make your utility bills MORE expensive.
The administration has, this year, agreed to return $2.7 billion in offshore wind developer payments to TotalEnergies and Ocean Winds. Invenergy, Duke Energy, and Invenergy have also been compensated. Nine federal leases will be cancelled. Ocean Winds is a partnership between Portugal's EDP Renewables, and France's ENGIE.
These agreements all included commitments to invest in fossil fuel projects.
In May, a group of?50 U.S. Environmental Groups wrote to RWE CEO Markus Krebber to ask him not cut a similar deal.
Seven states have challenged the TotalEnergies agreement in court. They claim that the administration did not follow the proper administrative processes, and misappropriated a government fund set aside for legal settlements despite the fact that there were no disputes between the parties.
California has also threatened legal action over the cancellation an Ocean Winds lease near its coast. (Reporting and editing by Nichola Grroom, Mark Porter and Nia William)
(source: Reuters)
