The Trump administration is paying another $1.2 billion to persuade an offshore wind developer to abandon its lease, bringing the total amount spent on cancelling such projects to nearly $4 billion.
The latest agreement involves German utility RWE, which said the wind projects covered by the lease would have been developed off the coasts of California, Louisiana and New York.
Under the agreement, RWE will use $900 million of the funds to acquire a small stake in a liquefied natural gas export terminal in Louisiana. The remaining $300 million will be used to purchase natural gas turbines for 15 peaking power plants across the country.
The New York wind project would have generated more than 3 gigawatts of electricity, according to Heatmap News. Instead, the money will help finance natural gas infrastructure.
Offshore wind gives way to natural gas
The planned peaking plants will rely on natural gas turbines, which are typically used when electricity demand is high. They are also among the more expensive and polluting types of natural gas power plants to operate.
It remains unclear when the turbines will be delivered or when the plants will become operational. The market is already facing a backlog for new gas turbines that extends into the early 2030s.
RWE, however, is continuing to invest in offshore wind outside the United States. The company recently acquired 6.9 gigawatts of offshore wind capacity in a U.K. auction.
The latest agreement adds to the Trump administration’s broader effort to scale back offshore wind development in the United States. According to the latest figures, the administration has now paid $3.93 billion for 12 offshore wind leases that developers have agreed to abandon.
