Energy: Trump administration pays RWE $1.2 billion for withdrawal from wind power
RWE is ending its offshore wind power projects in the USA. The company is receiving a high compensation payment for its withdrawal. This is not the first politically motivated deal of this kind.
The United States government has paid German energy giant RWE approximately $1.2 billion to exit offshore wind projects in the U.S., according to the company's statement on Thursday. The arrangement was reportedly made as part of a deal with the U.S. government. Essentially, this is a refund of lease costs incurred in developing projects off the coasts of New York, California, and Louisiana.
The projects RWE has decided to abandon are the result of years of planning, investment, and collaboration with federal agencies, as stated by RWE. Moving forward, there are no prospects for project approvals. The deal will enable RWE to "concentrate resources on energy projects that can be advanced with the necessary certainty," the company's statement said.
Specifically, RWE plans to invest around $900 million in acquiring a 16% indirect stake in a liquefied natural gas project in Louisiana, alongside a $300 million contract for new gas turbine generation equipment. Overall, the construction of at least 15 natural gas peaker plants in the U.S. is planned. Whether RWE is bound contractually to these investments is not clear from the statement.
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