US pays RWE $1.2bn to abandon offshore wind projects and shift investment to gas

The US Department of the Interior has reached a $1.2bn deal with German energy company RWE under which the firm will abandon its offshore wind projects in American waters. The agreement covers leases off the coasts of California and Louisiana, as well as in the New York Bight. RWE said it sees no path forward to permit the projects in the US for the foreseeable future.

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Under the deal, RWE said it will redirect the payout into conventional energy projects in the United States. The company said $900m of the sum will go towards a liquefied natural gas export terminal project in Louisiana. It also said it plans to invest about €17bn in the US over the next six years to expand its generation capacity.

Interior Secretary Doug Burgum said the agreement supports what he described as an energy system built on common sense and strengthens national energy security. The move is the latest in a series of actions by the Trump administration to halt offshore wind development and favour fossil fuel investment. President Donald Trump has repeatedly criticised wind power, saying shortly after returning to office that the government was not going to pursue wind projects and describing turbines as harmful to wildlife.

The administration has also reached similar agreements with other energy companies this year, including a March deal with TotalEnergies and a separate agreement with Duke Energy last month over offshore wind leases. The deal matters because it links federal energy policy directly to private investment decisions at a time when the US is trying to reshape its power mix. Offshore wind had been expected to play a role in expanding renewable generation along the Atlantic and Pacific coasts, but the administration has moved to slow or stop several projects.

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By steering capital toward gas and LNG, the agreement also underlines the continuing political and commercial weight of fossil fuels in the US energy sector. For RWE, the decision marks a significant retreat from its US offshore wind ambitions. The company had held leases in three separate areas, including the New York Bight, which has been seen as a potentially important zone for future wind development.

Its planned reinvestment in US gas and LNG suggests a broader strategic shift toward projects that face fewer permitting obstacles under the current administration. What remains unclear is how quickly the lease relinquishments will be completed and how the new investment plans will be carried out. It is also not yet clear whether the deal will affect other offshore wind developers with US projects.

The agreement is likely to be watched closely by energy companies, regulators and investors as the administration continues to press its case against wind power.

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