U.S. Government Pays French Developer $1B to Walk Away from Offshore Wind
The Trump Administration’s first strategy to strangle offshore wind development along the U.S. coast was aimed at its regulatory power but later thwarted in courts.
The latest weapon is paying money to make offshore wind go away.
France’s TotalEnergies and the U.S. Department of the Interior signed a $1 billion settlement this month that results in TotalEnergies leaving its Carolina Long Bay lease which it paid $160 million to obtain and was originally awarded four years ago. The deal pays TotalEnergies tto cover its lease expenses and ensures the company will no longer develop offshore wind projects in the U.S.
Instead, TotalEnergies will invest in the U.S. through liquified natural gas (LNG) project development, including a recent deal with developer Glenfarne committing to off-taking LNG from the Alaska LNG project.
“Considering that the development of offshore wind projects is not in the country’s interest, we have decided to renounce offshore wind development in the United States, in exchange for the reimbursement of the lease fees,” said Patrick Pouyanne, chairman and CEO of TotalEnergies. “Furthermore, these agreements, under which we will reinvest the refunded lease fees to finance the construction of the 29 Mt Rio Grande LNG plant and the development of our oil and gas activities, allows us to support the development of U.S. gas production and export. These investments will contribute to supplying Europe with much-needed LNG from the U.S. and provide gas for U.S. data center development.”
The Trump Administration has made its disdain obvious through both legal and financial strategies against offshore wind energy developers. Last year, the Department of Interior issued orders stopping work on five eastern U.S. offshore wind projects already under construction.
Some of those offshore wind projects were owned by global firms such as Ørsted, but Virginia-based utility Dominion Energy was also developing its Coastal Virginia project.
Federal judges in different injunctions overturned each of those stoppage orders and the five offshore wind projects resumed work. Earlier this month, the 704-MW Revolution Wind farm along the northeastern U.S. coastline began generating electricity into the New England grid.
“Revolution Wind is adding affordable, reliable American-made energy to New England’s grid, helping to meet growing energy demand and lower consumer costs,” Amanda Dasch, chief development officer at Ørsted, said when the energization was commenced. “Built by local, highly skilled union workers, Revolution Wind is a testament to states tapping their energy resources to strengthen regional energy security.”
In addition to Revolution and Coastal Virginia, the other three offshore wind projects resuming work after judicial injunctions were Sunrise, Vineyard I and Empire 1.
Trump Administration Department of Energy and Department of Interior leaders have spoken out against offshore wind as inefficient and potentially dangerous for national security. The administration is promoting greater diversity in energy development but focusing most of its fiscal and tactical support on natural gas and future nuclear generation.
“The prime duty of the United States government is to protect the American people,” said Secretary of the Interior Doug Burgum said in a December statement detailing the administration’s stance toward offshore wind. “Today’s action addresses emerging national security risks, including the rapid evolution of the relevant adversary technologies, and the vulnerabilities created by large-scale offshore wind projects with proximity near our east coast population centers. The Trump administration will always prioritize the security of the American people.”
At one point earlier this decade, the U.S. was aiming at developing 12 GW of offshore wind capacity. China is the global leader in offshore wind with more than 100 projects generating about 31 GW, while the United Kingdom, Germany and the Netherlands are well committed with a combined 28 GW of offshore generation capacity.
About the Author
Rod Walton, EnergyTech Managing Editor
Managing Editor
For EnergyTech editorial inquiries, please contact Managing Editor Rod Walton at [email protected].
Rod Walton has spent 17 years covering the energy industry as a newspaper and trade journalist. He formerly was energy writer and business editor at the Tulsa World. Later, he spent six years covering the electricity power sector for Pennwell and Clarion Events. He joined Endeavor and EnergyTech in November 2021.
Walton earned his Bachelors degree in journalism from the University of Oklahoma. His career stops include the Moore American, Bartlesville Examiner-Enterprise, Wagoner Tribune and Tulsa World.
EnergyTech is focused on the mission critical and large-scale energy users and their sustainability and resiliency goals. These include the commercial and industrial sectors, as well as the military, universities, data centers and microgrids. The C&I sectors together account for close to 30 percent of greenhouse gas emissions in the U.S.
He was named Managing Editor for Microgrid Knowledge and EnergyTech starting July 1, 2023
Many large-scale energy users such as Fortune 500 companies, and mission-critical users such as military bases, universities, healthcare facilities, public safety and data centers, shifting their energy priorities to reach net-zero carbon goals within the coming decades. These include plans for renewable energy power purchase agreements, but also on-site resiliency projects such as microgrids, combined heat and power, rooftop solar, energy storage, digitalization and building efficiency upgrades.