RWE agrees to abandon offshore wind leases in $1.22 billion deal with U.S. Interior Department
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German energy firm RWE will relinquish wind leases off New York, Louisiana and northern California in exchange for $1.22 billion, shifting investment to fossil-fuel projects.
German energy company RWE announced Thursday that it has reached a $1.22 billion agreement with the U.S. Interior Department to surrender offshore wind leases in New York, Louisiana and northern California near Humboldt. The settlement is the fifth and largest of its kind this year as the administration seeks to redirect developers toward fossil-fuel projects.
Interior Secretary Doug Bergum posted on X that the agreement reflects "an energy system built on common sense, not one dependent on costly subsidies or technologies that can’t meet our country’s current demand." RWE said the decision was made after determining there is no viable permitting path for the projects in the United States and that the settlement best serves its stakeholders.
The California lease, awarded under the previous administration, covered an area capable of generating up to 1.6 gigawatts—enough for roughly 600,000 homes—and was still in early development. RWE will allocate $900 million to acquire an indirect 16 percent stake in a liquefied natural gas terminal in Louisiana and $300 million toward natural-gas turbine development.
The move leaves only two offshore wind leases on the West Coast still active, one off Morro Bay and another off Humboldt Bay, and comes as California pursues a target of 25 gigawatts of offshore wind capacity by 2045. State officials have signaled intent to challenge the agreement in court, and several other states have previously contested similar deals.
"Markets change, and players change too; however, the drive for economic development and the construction of a multi-purpose heavy lift marine terminal does not," said Chris Mikkelson, executive director of the Humboldt Bay Harbor District, adding that the district remains committed to developing a terminal for offshore wind turbines.
Legal challenges are expected, with California’s attorney general and a group of seven states having already filed lawsuits against prior agreements, arguing procedural violations and misuse of funds.