Engie said it is in discussions with U.S. officials over the possible cancellation of its offshore wind leases, following the administration’s reimbursement agreement with TotalEnergies.
Engie CEO Catherine MacGregor said discussions were ongoing on whether terms could be agreed to cancel three offshore wind leases. No further details were disclosed.
The talks follow the U.S. administration’s March decision to reimburse TotalEnergies for nearly $1 billion paid for offshore wind leases in the New York Bight and off North Carolina. The administration said TotalEnergies had agreed to reinvest the money in the U.S. LNG sector, where it already has a project underway.
Engie holds the leases through Ocean Winds, its 50-50 offshore wind joint venture with EDP Renewables. Among the projects is SouthCoast Wind, which received approval for its Construction and Operations Plan in the final days of the previous administration. The project has a planned capacity of 2.4 GW and is located in Massachusetts. It had also secured power agreements to divide output between Massachusetts and Rhode Island. The project has since been deferred. Ocean Winds paid a reported $135 million for the lease in 2018.
In 2022, Ocean Winds also acquired the Bluepoint lease in the New York Bight for $765 million, with a proposed capacity of 2.4 GW. The project was still in early-stage development when the administration moved to halt offshore wind development. The company also holds the Golden State Wind lease off California, which it has said could support around 2 GW of capacity. It paid about $150 million for that lease.
The company said it has taken impairment charges on all three assets and suspended work on all three projects.
TotalEnergies CEO Patrick Pouyanne defended the reimbursement agreement, saying the company was at risk of losing $928 million. He also cited political volatility in the United States and low power prices, and said TotalEnergies would not pursue U.S. offshore wind development.
The proposed reimbursements are facing criticism from advocates and lawmakers, who are questioning both the legal basis for the payments and the source of the funding. Critics argue the leases did not provide for cancellation at this stage. They also contend there is no contractual requirement linking reimbursement to reinvestment in U.S. LNG.
It remains unclear how a challenge to the reimbursement arrangement could proceed or who would have standing to bring it.
