As the Trump administration finalized a deal Monday to pay an offshore wind developer for abandoning a pair of leases, the country’s largest offshore wind farm announced it had begun generating electricity.
The split-screen captures the state of offshore wind in America. Coastal Virginia Offshore Wind, which energized the first of its 176 turbines, is the largest of five projects under construction. All five will rank among the largest renewable energy projects ever built in the United States — adding electricity to the grid at a time when utilities are racing to keep up with power demand from data centers.
“This achievement marks another important step forward, adding much‑needed electricity to help meet the fastest‑growing power demand in the country,” Dominion Energy CEO Robert Blue wrote in a post on LinkedIn.
The project represents the culmination of a decades-long push to build offshore wind projects along the East Coast. But whether any future offshore wind projects follow is an open question.
The industry has been battered by rising costs and political attacks from President Donald Trump, a long-standing wind opponent who has tried to halt projects under construction and yank permits from planned developments. On Monday, his administration unveiled a new tactic: paying offshore wind developers to walk away.
The Interior Department has agreed to pay TotalEnergies $928 million to give up offshore wind leases off New York and North Carolina. As part of the deal, the French oil and gas giant said it would use the money to invest in oil and gas production, including a new liquefied natural gas terminal in Texas.
“The era of taxpayers subsidizing unreliable, unaffordable and unsecured energy is officially over,” Interior Secretary Doug Burgum told reporters Monday at CERAWeek by S&P Global, an energy conference in Houston.
Analysts said Total’s decision to walk away from its leases will have little practical impact on the U.S. offshore wind market in the short-term. Both projects were years away from sinking their first turbine foundation into the seabed.
Total’s project off New York was not expected to complete the federal permitting process until 2028,according to a federal website that tracks permitting for major infrastructure projects. And that estimated timeline was delivered in the immediate aftermath of Trump’s victory over former Vice President Kamala Harris in the 2024 presidential contest.
Progress has only slowed since. Total announced early last year that it was halting development of its U.S. projects and slashing its offshore wind staff in the country from 50 to five.
“This is a borderline speculative project that is seemingly now withdrawn,” said Sam Huntington, a power market analyst at S&P Global.
But Monday’s announcement showed how Trump has changed the calculus of offshore wind developers in the U.S. When Total CEO Patrick Pouyanné addressed questions about the industry’s future early last year, he noted the company’s lease was for 50 years.
“It will come one day,” he said at the time.
A year later, Pouyanné seems to have concluded American offshore wind isn’t worth the wait.
In a statement, the company said its studies had shown U.S. offshore wind developments are “costly and might have a negative impact on the power affordability for U.S. consumers.”
‘Not especially surprising’
The contrasting stances follow a year that saw Trump upend the U.S. offshore wind industry. The president has issued a barrage of orders halting offshore wind projects in construction in the name of national security, forcing developers to fight the orders in court. They all did so successfully.
Trump has also tried to revoke the permits of a second wave of projects that received approval from the Biden administration but haven’t started construction.
But some of the challenges facing Total predated Trump. The French oil giant bought its U.S. offshore wind leases at the top of the market. It paid $795 million to lease 84,000 acres off New York and $160 million to lease almost 55,000 acres off North Carolina in 2022. The high leasing costs stand in stark contrast to the $1.6 million Dominion paid in 2013 to lease 112,000 acres for Coastal Virginia Offshore Wind, known as CVOW.
“We think the lease was a massive anchor,” said Rob Barnett, a senior energy analyst at Bloomberg Intelligence.
Higher leasing costs translated to higher prices for Total’s power. The French company signed a deal to sell electricity to New Jersey for $165 per megawatt-hour, or about twice the cost of CVOW. That deal assumed Total would be able to recoup federal tax credits, but those have since been phased out under a budget law signed by Trump last year.
Without the tax credits to offset the higher leasing costs, the project’s profitably “quickly collapses,” Barnett said.
By contrast, offshore wind has continued to grow in Europe. In its statement Monday, Total was careful to point out that European offshore wind did not suffer from the same cost pressure as its American brethren. Much of the industry’s supply chain is centered in Europe.
“A broader pullback from the U.S. is not especially surprising,” Barnett said.
The big question going forward is whether Trump will extend a similar deal to other companies, and whether developers will take the president up on his offer. Trump has shaken developers’ faith in the U.S. regulatory environment, but the underlying need for power remains, analysts said.
CVOW, for instance, is a 2.6-gigawatt project capable of generating enough electricity to power 660,000 homes. That electricity is particularly important in states like Virginia, where power demand is on the rise due to the growth of data centers.
“You need power, right, and there’s not a lot of ways to get it,” Huntington said. Offshore wind is one of the few ways to add lots of power generation at once, particularly in the Northeast, which lacks the gas and onshore renewable resources of other parts of the U.S.
It was particularly striking to see Total shift its money from offshore wind to an LNG terminal at a time of rising electricity demand, said Seth Kaplan, a power sector analyst at Grid Strategies who previously worked in offshore wind.
“You removed a planned large energy production facility that would solely have produced electricity fed into the American grid, and instead you’re going to build a liquefaction terminal that will take American natural gas and send it abroad,” he said. “Do the math on that.”
