Trump administration persuades another company to cancel wind projects in favor of gas

Following the earlier redirection of investment by TotalEnergies, the US White House has reached an agreement with another company. Invenergy will receive nearly USD 800 million in compensation for withdrawing from offshore wind farm projects and will invest the funds in natural gas instead. The company announced the deal on Wednesday.

The US presidential administration is continuing its efforts to cancel wind power projects. After blocking projects last year, it has now adopted a new, less heavy-handed approach. It will reimburse companies for land lease costs if they agree to redirect the money to fossil fuels. The White House used this approach earlier this year, returning nearly USD 1 billion to French giant TotalEnergies. Golden State Wind also accepted a similar deal.

Invenergy is now the latest company to accept the deal. It will redirect the money from wind projects to natural gas and geothermal energy projects. According to the Financial Times, the company is not abandoning wind investments altogether, but the deal gives it a way to shift capital from stalled projects to more active ones.

The administration is paying the company this amount to cancel leases for offshore project development at four locations. Two are in the Gulf of Maine, one is in New York and one is in California, at Morro Bay. Here, too, a lawsuit challenging the legality of these deals could be brought, as happened with previous agreements.

These agreements with companies are likely a change in strategy after the effort to block projects that were close to completion failed in court.

Paradoxically, while the Trump administration opposes solar and wind power, it supports geothermal energy as a clean alternative. Geothermal projects, for example, retained tax benefits introduced as part of the Biden administration’s changes, while solar and wind projects lost their tax breaks.

Legal battles

Companies whose projects Trump blocked last year won their lawsuits. There have also been several other court defeats for the Trump administration over its efforts to hinder the development of renewable energy.

The Trump administration’s new strategy has also drawn a response. Several states, including New York, where a significant part of the project was due to be built, have appealed the deal with TotalEnergies. A New York fund has also threatened to reconsider its investment in TotalEnergies. The California Energy Commission, meanwhile, has challenged Golden State Wind’s deal and is seeking more information about it.

The politicization and controversy surrounding energy projects, particularly renewable ones, thus appear to be an increasingly serious problem for energy companies and are raising investment risks in the United States.