WASHINGTON — The Trump administration has reached a $1.22 billion agreement with German energy company RWE under which the company will terminate three U.S. offshore wind leases and redirect investment toward natural gas infrastructure, marking the largest of a series of federal settlements aimed at unwinding offshore wind development.
RWE said the agreement with the U.S. Department of the Interior will end its offshore wind leases off the coasts of New York, California and Louisiana after years of development work that the company said could no longer advance because of permitting and regulatory obstacles.
Under the agreement, RWE will receive reimbursement totaling $1.22 billion, matching the value of its lease investments. In return, the company has committed to invest about $900 million in a liquefied natural gas project in Louisiana and roughly $300 million in natural gas-fired peaker power plants in the United States, according to the company and the Interior Department.
Interior Secretary Doug Burgum welcomed the agreement, saying the administration was pursuing an energy strategy centered on reliable and affordable domestic power supplies. The department has argued that the settlements reduce dependence on what it describes as costly offshore wind projects while encouraging investment in conventional energy infrastructure.
RWE said it had spent years planning the offshore wind developments but concluded there was no viable path to construction under current federal policies. The company said the agreement provides certainty and allows it to redirect capital to projects that can move forward.
The settlement is the fifth announced by the administration this year as part of its broader effort to halt offshore wind development. Previous agreements were reached with companies including TotalEnergies and Invenergy, bringing the total value of such arrangements to nearly $4 billion, according to Reuters calculations.
The administration's approach has drawn criticism from Democratic lawmakers, environmental organizations and several states, which argue the agreements improperly use federal funds to dismantle renewable energy projects and favor fossil fuel development. Legal challenges have been filed against earlier settlements, with plaintiffs contending the agreements violate federal law governing offshore energy leases. The administration has defended the policy as consistent with its energy agenda.
The RWE leases were still in the planning stage and were not expected to begin generating electricity until the 2030s. With the agreement finalized, the offshore wind projects will not proceed, while the company's planned investments in natural gas infrastructure are expected to move ahead under the terms of the settlement.
