A government paying a company not to build power plants is usually the stuff of antitrust stories. This time it is offshore wind. On August 6, 2026, German energy giant RWE reached an agreement with the US Department of the Interior: RWE gives up its offshore wind leases off the coasts of New York, California, and Louisiana, and in exchange receives a $1.22 billion payout from public funds. The Guardian and the BBC reported the deal in succession.
RWE’s official framing is blunt: “there is no path forward to permit these projects in the US for the foreseeable future.” Interior Secretary Doug Burgum welcomed RWE’s “voluntary investment” in projects that strengthen the nation’s energy security, criticizing energy systems dependent on “costly subsidies.” Trump’s own version was simpler: “we’re not going to do the wind thing.”
The Deal: Who Pays, for What
The money comes from the Interior Department; what RWE hands over is offshore wind acreage in three waters. The most valuable piece is the New York Bight lease, which RWE won at the Biden administration’s 2022 auction for $1.1 billion; the California and Louisiana leases cost a combined $163 million. In other words, the federal government is using public money to buy back a foreign company’s sunk costs at face value — and no wind farms will ever appear in those waters.
Where the money goes is already public: RWE will spend $900 million on a 16 percent stake in a Louisiana LNG export terminal and signed a $300 million turbine reservation agreement covering a pipeline of 15 natural gas peaker plants. The company also announced plans to invest roughly 17 billion euros ($19.6 billion) in the US over six years, saying the settlement lets it “direct resources toward energy projects that can be advanced with certainty.” Wind exits, gas enters; the ledger is clear.
The Fifth Payout: The Running Tab for Killing Offshore Wind
For the Trump administration, this is not the first such arrangement, but it is the largest to date. In March 2026, France’s TotalEnergies took $928 million to give up its New York lease, prompting a lawsuit by seven states led by New York Attorney General Letitia James, who called it a “sham deal” and an “illegal agreement.” The month before, Duke Energy received $129 million. By the Guardian’s count, the RWE deal is the fifth of its kind, bringing total federal spending on killing offshore wind projects to almost $4 billion. Over the same period the administration has spent up to $1.1 billion boosting coal — spending that critics say shows up on household energy bills.
The stranded-asset mechanics are worth noting. RWE bought the New York lease for $1.1 billion at the Biden administration’s 2022 auction, when federal permitting support was the working assumption; the policy reversal stranded that capital, and the payout now prices the reversal back out. Companies are not being compensated for wind farms they built — they are being repaid for leases on projects the government has decided will never be permitted.
The Power Ledger: Backdrop to AI Data Centers’ Hunger
For anyone tracking AI infrastructure, this story matters on the supply side. Data center power demand is climbing fast, and offshore wind was one of the few options that could serve the US East Coast at scale, close to load. That option is now being systematically closed off, leaving new data center load to be absorbed by gas plants and the existing grid. When compute expansion and energy policy pull in opposite directions, electricity prices, interconnection queues, and local opposition become real costs of AI infrastructure. Who ends up paying that bill is an open question.
Criticism and Legal Risk
Pay-to-abandon deals are legally shaky. The seven-state lawsuit over the TotalEnergies agreement is still live, with James calling the earlier deals a “sham” and “illegal”; the RWE payout is larger and covers more water, and a fresh round of legal challenges looks likely. The deal is signed and the leases will not come back — but whether the use of public funds is lawful is something only the courts will decide.
Sources
- Trump administration to pay German firm $1.22bn to cut offshore wind leases — The Guardian
- US strikes $1.2B deal to pay German firm to halt offshore wind projects — BBC News
AI-assisted summary compiled from the sources above, reviewed by a human before publishing.