Trump Administration Redirects Billions in Taxpayer Funds from Offshore Wind to Fossil Fuels – RWE Receives USD 1.22 Billion
Washington/Essen — The US government under President Donald Trump is continuing its campaign against offshore wind energy through a systematic, multi-billion-dollar buyback of projects. In the latest case, RWE will receive USD 1.22 billion for returning its offshore wind leases in the United States.
RWE Returns All US Offshore Wind Leases
The settlement agreement between RWE U.S. Offshore and the US Department of the Interior covers lease areas in the New York Bight as well as off the coasts of California and Louisiana. According to RWE, the offshore wind projects planned for these areas have no foreseeable prospect of receiving permits. The settlement also resolves the company's legal claims against the US government.
RWE had spent more than USD 1 billion acquiring the lease areas and developing the projects. The New York Bight lease alone cost the company around USD 1.1 billion at a 2022 auction, while the two other leases together cost about USD 163 million. The compensation payment now agreed amounts to USD 1.22 billion. Prior to the settlement, RWE had also acquired National Grid Ventures' minority stake of around 27 percent in the Community Offshore Wind joint venture.
Federal Waters: Trump Administration Holds Authority over Offshore Leases
In the United States, jurisdiction is divided between the federal government and the individual states. US states hold extensive authority over energy policy within their own jurisdictions. However, the offshore areas returned by RWE lie in federal waters and therefore fall under the jurisdiction of the US government.
In most states, state waters extend three nautical miles (about 5.6 kilometers) from the coast. Beyond that boundary lies the Outer Continental Shelf (OCS), where the federal government awards offshore wind leases through the Bureau of Ocean Energy Management (BOEM), an agency of the US Department of the Interior. Off Texas and Florida's Gulf coast, state waters extend up to nine nautical miles from the coast.
RWE Directs USD 1.2 Billion into LNG and Gas-Fired Power Plants
Alongside its offshore wind exit, RWE is stepping up investment in the US gas business. The company is acquiring an indirect 16 percent stake in the Louisiana LNG project for USD 900 million. The funds are earmarked for financing construction of the LNG terminal.
RWE has earmarked a further USD 300 million for reserving gas turbine capacity. The company is currently developing a pipeline of 15 peak-load gas-fired power plant projects across various US markets. This puts the USD 1.22 billion compensation payment for the offshore wind exit against roughly USD 1.2 billion in investments in LNG and gas-fired power plant capacity.
Despite the offshore wind exit, RWE is maintaining its US business. RWE Americas plans net investments of around EUR 17 billion between 2026 and 2031 in expanding onshore wind and solar energy, battery storage and flexible gas-fired power plants. Generation capacity is set to rise from around 13 GW currently across 27 states to 22 GW by 2031. According to the company, it commissioned around 2 GW of new power generation capacity in the United States in 2025 alone.
Trump Administration: Nearly USD 4 Billion for Twelve Offshore Wind Leases Redirected into Fossil Fuel Investments Since March
The RWE settlement continues a series of agreements under which the Trump administration has been reclaiming offshore wind leases and redirecting investment into other energy projects since March 2026. TotalEnergies was first. The French energy group is receiving USD 928 million back for two offshore wind leases and investing a corresponding amount in the Rio Grande LNG project in Texas as well as in conventional oil and shale gas projects in the United States.
Two offshore wind projects managed by Ocean Winds followed at the end of April 2026. Up to USD 765 million is being reimbursed for Bluepoint Wind after a corresponding amount was invested in a US LNG facility. For Golden State Wind off California, a repayment of around USD 120 million corresponds to investments in US oil and gas projects, energy infrastructure or LNG projects on the Gulf Coast. Ocean Winds is a joint venture between French energy group Engie and Portugal's EDP Renewables.
Invenergy followed in June with four offshore wind leases worth a total of USD 765 million. The company is redirecting the corresponding amount into gas-fired power plants in Indiana, Wisconsin, Iowa, Kansas and Missouri, as well as into geothermal projects in the western United States.
At the end of June, the US government reached a further agreement with Duke Energy. For returning an offshore wind lease off North Carolina, the company will receive nearly USD 129 million. Duke plans to invest a corresponding amount in additional generation capacity, citing natural gas as well as nuclear energy and grid infrastructure.
With the three RWE leases and the USD 1.22 billion compensation payment, the total volume of the five agreements rises to around USD 3.93 billion. In all, twelve offshore wind leases are being surrendered as a result. The investments agreed in return are focused primarily on LNG, natural gas, and oil and gas production.
Source: IWR Online, 10 Aug 2026
