The Trump administration has agreed to pay the German energy firm RWE $1.22 billion to abandon its plans for offshore wind farms near New York, California, and Louisiana. This marks the fifth such arrangement this year, aimed at stopping offshore wind development.

Under the deal, RWE will voluntarily surrender three federal wind leases in these waters. These projects remain in their infancy, and with the administration having already fully paused federal permitting for offshore wind, their path forward is extremely limited. The government will roughly reimburse the company for the lease fees it paid during the Biden era and also resolve related legal disputes.

RWE stated that after evaluation, it determined these projects cannot be permitted in the foreseeable future. Choosing to settle allows the company to shift resources toward energy projects with greater certainty. The firm plans to invest a nearly identical amount into the U.S. natural gas sector: $900 million to indirectly acquire a 16% stake in a Louisiana liquefied natural gas project, along with a $300 million order for new gas turbines. It also intends to build at least 15 gas-fired peaker plants across the U.S.

This transaction has become a pattern. Since March, the administration has reached similar agreements with companies like TotalEnergies and Invenergy, returning offshore wind leases off the coasts of California, Maine, New Jersey, New York, and North Carolina in exchange for commitments to switch to fossil fuel projects. Including this latest deal, the government has now spent approximately $3.9 billion to induce companies to terminate 12 lease areas.

Interior Secretary Doug Burgum commented, "Americans deserve a commonsense energy system, not one reliant on expensive subsidies or technology that cannot meet current demands. We welcome RWE's agreement and its voluntary investment in projects that strengthen our national energy security."

Democrats have criticized the move. New York Senator Chuck Schumer argued that while New Yorkers face high energy costs, the administration is spending nearly $4 billion in federal funds to cancel leases that could have provided clean power. Trump has long criticized wind power as "ugly and expensive" and has sought to block new projects.

Last year, the Interior Department ordered a halt to five offshore wind farms under construction on the East Coast, though each order was overturned by federal judges. After losing those legal battles over shutdown orders, the administration pivoted to buying out leases. Several Democratic-controlled states, including New York, have filed lawsuits over these similar agreements.

RWE, one of the world's largest renewable energy developers, currently operates 18 offshore wind farms in Europe and elsewhere. Following Trump's 2024 election victory, the company had already paused plans to expand its U.S. offshore wind development. Its American business also includes onshore wind, solar, battery storage, and some gas-fired power generation.