U.S. Offshore Wind Sees First Lease Buyout

Since taking office in January 2025, the Trump administration has waged a sustained regulatory campaign against the offshore wind industry by halting permitting and issuing stop-work orders, creating enough legal uncertainty to give developers pause. The administration might also be taking on a new strategy.

A Year of Regulatory Whiplash

As seen in the graphic below, the administration's campaign began on day one. On January 20, 2025, President Trump signed an executive order pausing all new offshore wind lease sales and federal permitting. By December 2025, a federal judge had vacated it, siding with 17 state attorneys general who argued the order was unlawful. Rather than stand down, the Department of the Interior responded with stop-work orders on five active construction projects: Vineyard Wind 1, Empire Wind, Revolution Wind, Sunrise Wind, and Coastal Virginia, citing “national security concerns.” Courts again stepped in, lifting the orders in early February 2026 after finding no credible threat. Despite these headwinds, several projects are nearing completion and remain on track to reach full commercial operations this year. Notably, Vineyard Wind 1 has completed construction of all 62 of its offshore wind turbines, while Revolution Wind and Coastal Virginia both began delivering their first power to the grid in March.

TotalEnergies Takes the Exit Ramp

Amid this regulatory uncertainty, on March 23, 2026, the Secretary of the Interior and CEO of TotalEnergies announced a $928 million settlement in which the federal government agreed to buy out TotalEnergies's U.S. offshore wind leases. In exchange, TotalEnergies pledged to reinvest the proceeds into LNG and Gulf of America oil production. A few days later, the Department of the Interior began holding talks with other offshore wind leaseholders about similar arrangements.

The deal stands out not just for its size, but for what it exposes about the broader developer landscape. TotalEnergies held one of the largest lease positions in the U.S. offshore wind market, but this has now been relinquished. The majority of remaining leases are held by developers still in the planning and permitting stage, or with no active development path at all.

As seen above, only a fraction of the capital committed to U.S. offshore wind leases is moving toward production. For the rest, every month of inactivity is a month of carrying costs on an asset with no clear monetization timeline. TotalEnergies's willingness to take a buyout and redeploy into fossil fuels might be a pragmatic choice based on that math, and other companies are almost certainly running similar calculations.

What's at Stake for New England's Grid

These policy decisions have real consequences for grid operators. ISO New England (ISO-NE), which manages the bulk power system across New England, could have potentially relied upon a substantial offshore wind buildout to help meet future load growth and reliability requirements. If all the planned projects in the area were to come online, offshore wind could meet 38% of ISO-NE's hourly load on average in 2030. However, the at-risk portion, which consists of planned projects not yet under construction, represents more than 70% of the potential offshore wind capacity in the region. If buyouts continue and more of those wind projects are abandoned, the gap between what is planned and what is ultimately built will widen considerably, leaving ISO-NE to replace that lost generation with alternative resources, most likely oil and natural gas.

The Exit Ramp Is Getting Crowded

In the wake of the TotalEnergies deal, the Department of the Interior is actively courting similar agreements. Developers holding hundreds of millions in inactive positions have limited options: wait out an administration that has shown no signs of reversing course, absorb the carrying costs indefinitely, or take the exit ramp. For companies with diversified energy portfolios, particularly those with existing exposure to LNG or fossil fuels, a buyout that redeploys capital into favored sectors may make the most business sense. However, renewable-focused developers face fewer strategic alternatives and are more exposed to stranded lease value. What happens to the billions locked in planning or inactive leases will define the trajectory of offshore wind in the U.S. for the better part of this decade.

Be on the lookout for more Energy Market Insights as we continue to monitor offshore wind development and the wider power market landscape.

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