Trump administration pays $765M to end offshore wind leases

The Trump administration says it will pay Invenergy $765 million to voluntarily terminate four U.S. offshore wind leases, including a Morro Bay project off California. The company will redirect the money toward natural-gas-fired generation and geothermal devel

On a wind-swept stretch of ocean off Morro Bay. one of the last offshore wind bets in California is set to fade—paid for. in part. by the federal government. The Trump administration said Wednesday it will pay Invenergy $765 million to walk away from four U.S. wind leases, including the lease off the coast of California.

The agreement, the U.S. Department of Energy said. will have Chicago-based Invenergy “voluntarily terminate” its lease off Morro Bay. as well as a lease in the New York Bight and two leases off the Gulf of Maine. Instead of pursuing offshore wind. the company will redirect millions toward natural-gas-fired power plants in Indiana. Wisconsin. Iowa. Kansas and Missouri. along with geothermal power generation projects in the western United States.

Geothermal, by design, doesn’t rely on weather the way wind does. The technology taps pockets of heat rising from the center of the earth. then uses that heat to spin turbines and generate power. The $765 million figure. officials said. represents a partial reimbursement for what the companies paid for the leases awarded under the Biden administration. Those leases are ocean areas designated by the U.S. government for potential offshore wind development.

This is the third time the Trump administration has announced such a wind-leasing rollback this year. In March. the Interior Department announced a $1 billion deal with the French firm TotalEnergies to abandon its wind leases off the North Carolina and New York coasts. In April. it struck an $885 million deal with Golden State Wind and Bluepoint Wind to end their leases off the coast of California. New Jersey and New York. with both agreeing to instead invest in “reliable conventional energy projects.”.

The latest move leaves only three offshore wind leases intact off California: one off Morro Bay and two off the coast of Humboldt Bay. Last year, the administration also terminated nearly half a billion dollars local officials were planning to use for the offshore wind effort in Humboldt.

For President Trump and his advisers. the logic has been consistent—offshore wind. they’ve argued. is intermittent. unreliable and unsightly. The administration has emphasized fossil fuel expansion instead. including a recent $700 million investment in new and existing coal plants and the first-ever coal export terminal on the West Coast in Oakland.

Interior Secretary Doug Burgum framed the payment as a shift toward dependable infrastructure. In a statement. he said. “President Trump is committed to unleashing affordable. reliable American energy for our country’s communities and putting the American people first through common-sense action.” Burgum added that. “Under President Trump. companies are shifting investment back toward dependable. secure energy infrastructure that can power our economy and lower utility costs.”.

Burgum also described offshore wind projects as threats to national security, a point many experts have dismissed. Still. the effect is immediate for places like California. where offshore wind has been pitched as a way to diversify the state’s energy mix alongside solar and battery storage. California has set a target of 25 gigawatts of offshore wind power by 2045. and officials have said it could play an important role in balancing the grid.

The lease Invenergy is leaving in California, known as Even Keel Wind, covered about 80,000 acres roughly 20 miles off the coast and was estimated to support 2 gigawatts of offshore wind capacity—enough, the agreement says, to power about 1 million homes.

Opponents say the new deal is the latest in a pattern of federal spending that benefits conventional fuels at the expense of renewable development. Environmental groups and Democratic lawmakers are expected to challenge the agreement after calling into question the legality of previous deals earlier this year.

In California. state officials are already investigating the deal with Golden State Wind. and the California Energy Commission has subpoenaed details about the payout. Rep. Jared Huffman (D-San Rafael) said Wednesday that the administration is misusing public money. “Donald Trump is using your tax dollars to make America more dependent on dirty, volatile fossil fuels,” he said. “He is paying energy companies to kill homegrown offshore wind that will put electricity on the grid. lower energy bills. and create good jobs. and he is funneling that money straight back to fossil fuels. leaving families at the mercy of every price spike and global shock. It is hard to imagine a more backwards use of taxpayer money.”.

Eddie Ahn. executive director of Brightline Defense. a nonprofit environmental justice and policy advocacy group. argued that the decision drains jobs and investment from California. He said the agreement is “yanking” jobs and investments away from Californians. “California should investigate this second backroom deal to the full extent of the law and demand accountability for this blatant misuse of taxpayer funds. ” he said.

Invenergy, however, says the decision is driven by the realities of meeting demand for electricity. The company said the agreement was motivated by soaring demand expected to grow as much as 40% in the next decade. driven largely by AI data centers. Invenergy said it is “focused on delivering reliable. affordable energy for our customers and supporting disciplined investment at scale. ” adding that it plans to shift resources toward what it views as faster-to-deliver options.

A source familiar with the company said leaving offshore wind also reflects policy and market realities that are “inescapable right now.” Natural gas and geothermal are both seen as quicker ways to meet demand. the source said. The company is looking to start exploratory drilling for geothermal later this year in the Western U.S. including potential sites in California. Idaho. Nevada and other states.

As one lease is terminated and another future is redirected, California’s remaining offshore wind footprint narrows—shrinking while the state keeps its 2045 target in view.

offshore wind Invenergy Morro Bay geothermal natural gas Doug Burgum California Energy Commission Humboldt Bay Even Keel Wind Trump administration