U.S. Agrees to Deal to Cancel Two More Offshore Wind Farm Leases

The U.S. Department of the Interior announced today that it has reached agreements to redirect the planned investment for two offshore wind farm projects into the oil and gas sector, and in exchange, it will reimburse the fees paid for the wind leases. The Trump administration has been pursuing this strategy with early-stage offshore wind projects that were still in the permitting stage, having already reached a similar deal valued at nearly $1 billion with TotalEnergies for its U.S. offshore wind portfolio.

Today’s agreements are with two of the lease sites owned by Ocean Winds, a joint venture between EDP Renewables and ENGIE, which was co-investing with Global Infrastructure Partners, which was acquired in 2024 by BlackRock. Details of the agreements are vague in the announcement, but it appears GIP agrees to make investments into U.S. LNG and U.S. oil and gas assets, and the U.S. will refund the total lease payments to Ocean Winds up to the amount of the investments made by GIP.

The larger of the two agreements is for a track in the New York Bight, which Ocean Winds won in the hotly contested 2022 auction. The company had proposed two projects located approximately 38 nautical miles off the coast of New York and 53 nm off the coast of New Jersey. At full capacity, the lease area, they said, would be able to generate 2.4 GW. Known as Bluepoint Wind, it was in the early stages of development, but had been proposed to New York and New Jersey.

GIP agrees to invest up to $765 million, the original bid amount for the Bluepoint lease, into a U.S.-based LNG facility. The Department of the Interior says that, after the accelerated investment, it will cancel the offshore wind lease and reimburse the company.

The second agreement is with Gold State Wind, the lease for a project near Morro Bay, California, that was in the early planning stages. It had also won the lease at the end of 2022 and said it could support up to 2 GW of power. The company is agreeing to invest in U.S. oil and gas assets and will receive a reimbursement of up to $120 million for the offshore wind lease.

“The companies that bid for these offshore wind leases were basically sold a product in 2022 that was only viable when propped up by massive taxpayer subsidies,” asserted Secretary of the Interior Doug Burgum. He calls the wind projects “intermittent, higher-cost energy sources,” highlighting that the investments will be shifted to conventional energy.

Engie’s CEO, Catherine MacGregor, had said last week that the company was in discussions with the U.S. regarding its offshore wind portfolio. Ocean Winds is a global offshore wind developer reporting it is present in eight countries with 19 projects, five of which are currently under construction in France, Poland, and the UK. Like others in the U.S. market, it had cited its investments as stranded assets due to the change in policy with the Trump administration.

Ocean Winds has a third offshore wind lease in the U.S., which is more developed, having gained its COP approval in the last days of the Biden administration. Called Southcoast Wind, it would be 2.4 GW located off the coast of Massachusetts. It had reached power agreements to split its output between Massachusetts and Rhode Island, and had expected to start construction in 2025. It is not cited in today’s announcement with the Department of the Interior.

The announcement references the potential of “protracted litigation,” which it says would benefit neither the developers nor the United States. The Trump administration is already in court fighting the under-construction projects, asserting national security issues due to radar interference, and challenging approved construction plans for other projects.

The Department of the Interior struck the first deal with TotalEnergies to buy back offshore leases and said it would explore a similar method for other leases. Critics are questioning the administration’s legal right to buy back the leases and how it will fund the payments. Today’s announcement seems to seek to blunt some of the critics, calling the deals for the two Ocean Winds leases “voluntary” agreements and a “dollar-for-dollar reimbursement.”