Friday, 7 August 2026, 22:01
German energy giant RWE has become the latest offshore wind developer to accept a federal payout and walk away from U.S. projects, including a large lease area off Northern California. The $1.22 billion settlement with the U.S. Interior Department removes up to 1.6 gigawatts of planned wind capacity near Humboldt and deepens the challenge to California's 2045 clean energy target.
RWE announced Thursday that it reached a settlement with the U.S. Department of the Interior to give up its wind leases off the coasts of New York, Louisiana and California. The company said it saw no path forward to permit the projects in the U.S. for the foreseeable future.
"After careful consideration, it was determined there is no path forward to permit these projects in the U.S. for the foreseeable future," RWE said in a statement. "The company determined that this resolution best serves the interests of its stakeholders and allows it to direct resources toward energy projects that can be advanced with certainty."
Interior Secretary Doug Burgum welcomed the agreement. "Americans deserve an energy system built on common sense, not one dependent on costly subsidies or technologies that can't meet our country's current demand," he said on X. The department argued that redirecting funds into oil, gas and LNG infrastructure ensures reliable, domestically controlled energy.
The RWE payout is the fifth federal deal of its kind this year. Earlier agreements with TotalEnergies, Ocean Winds, Invenergy and Duke Energy totaled roughly $2.7 billion. In exchange, those companies committed to invest in U.S. fossil fuel projects. RWE will spend $900 million to buy a 16% stake in a Louisiana LNG terminal and $300 million to support natural gas turbine development.
RWE's California lease area, located about 30 miles west of Eureka, was awarded under the Biden administration and had capacity for up to 1.6 gigawatts of offshore wind, enough for about 600,000 homes. The project was still in early stages.
Experts said the move does nothing to address California's supply challenges, energy prices or climate goals. The state had been working toward a target of 25 gigawatts of offshore wind by 2045. Thursday's agreement leaves only two leases intact along the West Coast: one off Morro Bay and one off Humboldt Bay.
The decision hits the North Coast economy directly. The RWE lease area sits off Humboldt County, and local officials have been preparing port infrastructure for floating wind turbines. Chris Mikkelson, executive director of the Humboldt Bay Harbor District, said the district remains committed to building a heavy lift marine terminal, with construction possible by the end of 2027.
"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," Mikkelson said.
On the Central Coast, Morro Bay now depends on Equinor Wind US, the only remaining company holding a federal lease in the Morro Bay Wind Energy Area. Equinor confirmed there have been no updates since it said in June that no additional development activities are planned at this time.
California has pursued offshore wind as a core part of its clean energy agenda, requiring major port upgrades, new transmission lines and giant floating turbines. The Trump administration, however, has pushed developers away from offshore wind, canceling federal funding and halting projects near completion. California filed a notice of intent to sue in June over a previous buyout with Golden State Wind, and a group of seven states has challenged the TotalEnergies deal in court.
Rep. Jared Huffman (D-San Rafael), whose district includes Humboldt County, called the deals "deeply corrupt and illegal" and promised accountability. Legal challenges are likely to follow Thursday's announcement. For now, Humboldt Bay Harbor District is pushing ahead with port plans, while Morro Bay waits on Equinor. The future of California offshore wind may depend on the courts and the next federal policy shift.
