The U.S. Department of the Interior announced that it has signed a new agreement with energy developer Invenergy to terminate four offshore wind leases totaling $765 million, with the funds to be redirected into the development of natural gas and geothermal projects in the U.S.
The announcement forms part of a new tactic employed by the Trump administration to stop the development of offshore wind projects, following an initial $1 billion deal announced in March with TotalEnergies to stop its work on U.S. offshore wind projects, and to invest in gas and power projects.
President Trump signed a Presidential Memorandum on his first day in office, indefinitely halting all federal approvals for wind energy projects, and more recently pausing the leases for all large-scale offshore wind projects under construction in the U.S. on national security grounds to freeze the development five major projects along the U.S. east coast.
Most of the administration’s attempts to date have not fully succeeded, with a federal court striking down Trump’s initial halt on wind energy approvals, and each of the projects targeted by the lease pause move issued preliminary injunctions against the order, allowing work to proceed in the interim. Despite the setbacks, however, the administration’s actions have made wind power investment decisions more difficult for developers.
The administration’s deal with TotalEnergies is also facing legal challenges, with a coalition of seven state Attorneys General recently launching a lawsuit against the administration in a federal court arguing that the agreement violated several laws, and asking the court to vacate the lease cancellation.
Under the new agreement, Invenergy will voluntarily terminate its affiliates’ four offshore wind leases located in the New York Bight, Central Coast of California and the Gulf of Maine. Two of the larger projects, in New York and California, were anticipated provide around 2.4 GW and 1.5 GW of renewable energy capacity, respectively.
U.S. Secretary of the Interior Doug Burgum, said:
“The offshore wind leases were sold under the assumptions that taxpayers would indefinitely subsidize costly, unreliable projects and that no national security concerns were implicated – both assumptions have since been proven false. Under President Trump, companies are shifting investment back toward dependable, secure energy infrastructure that can power our economy and lower utility costs.”
The Interior Department said that the funds from the wind leases will be redirected towards other domestic energy sources including the development of natural gas-fired power plants in Indiana, Wisconsin, Iowa, Kansas, and Missouri and geothermal power generation projects in the Western U.S.
Daniel Runyan, Invenergy’s Senior Vice President for Development, said:
“At a time of unprecedented energy demand, Invenergy is focused on delivering reliable, affordable energy for our customers and supporting disciplined investment at scale. That is why Invenergy, with our affiliates and on behalf of our various stakeholders, will deploy additional capital into projects that can be delivered on a commercially reasonable timeline and meet customer demand while continuing to evaluate opportunities as market conditions evolve.”