Interior Pays $3.9 Billion to Retire Offshore Wind Leases While the Five Projects It Tried to Stop Keep Building
The Interior Department has agreed to pay about $3.9 billion to energy companies to give up 12 offshore wind leases, while losing every court fight over the five projects already under construction. Washington’s offshore wind policy now runs on two tracks: cash to stop future farms, and lawsuits it can’t win against the ones in the water.
On 18 September Ørsted installed the 65th and last turbine at Revolution Wind, the 704-megawatt farm off Rhode Island that Interior ordered to stop work twice. It has fed partial power to Rhode Island and Connecticut since March.
The stop-work orders that didn’t hold
On 22 December 2025 the Bureau of Ocean Energy Management suspended the leases of all five farms under construction for 90 days: Vineyard Wind 1, Revolution Wind, Coastal Virginia Offshore Wind, Sunrise Wind and Empire Wind 1. It cited national security risks drawn from classified Pentagon reports.
The courts unpicked the orders within six weeks. Judge Royce Lamberth in Washington ruled for Revolution Wind on 12 January, finding Interior hadn’t explained its change of position. Empire Wind won on 15 January, Coastal Virginia on 16 January in the Eastern District of Virginia, Vineyard Wind on 27 January in Boston and Sunrise Wind on 2 February. Interior said it would appeal and then let the deadline pass in April.
The broader ban fell the same way. The January 2025 presidential memorandum had frozen all offshore wind permits pending review. Judge Patti Saris in Massachusetts vacated that section on 8 December 2025 in a suit by 17 states and the District of Columbia. The government appealed to the First Circuit, then dropped the appeal on 10 June 2026.
In April Judge Denise Casper, also in Massachusetts, blocked five more Interior and Army Corps policies for members of the industry groups that sued, including the July 2025 memo that sent every wind and solar decision up to the Secretary’s office. In August a federal court in Oregon ordered the Defense Department to resume the routine reviews of wind projects it had frozen.
What’s actually getting built
Five farms will be finished. South Fork Wind and Vineyard Wind 1, at 806 megawatts, are complete. Coastal Virginia, the largest at 2.6 gigawatts and 176 turbines, began delivering power in March. Dominion said it was 81% complete at the end of July, with the last turbine now due by the end of 2027 and the budget up to $11.65 billion. Empire Wind and Sunrise Wind, the 924-megawatt farm for New York, are due online in 2027.
That’s about the whole US pipeline. BloombergNEF expected 39 gigawatts of offshore wind by 2035 when the 2024 election was decided. By the end of 2025 its forecast was 6 gigawatts, the five farms already under way.
The projects that had federal approval but hadn’t started are going backwards. Courts have granted BOEM’s requests to take back and reconsider the construction plans for SouthCoast Wind, in November 2025, and Atlantic Shores, in August 2026. A judge in Maryland refused a similar request for US Wind’s project in December 2025, though she left the door open for the government to try again.
Buying leases back
The new tool is the buyout. In March TotalEnergies agreed to give up two leases, off New York and the Carolinas, for which it paid $928 million in 2022. The government reimburses the company dollar for dollar once it invests the same amount in oil and gas, including the Rio Grande LNG plant in Texas. It also pledged to build no new US offshore wind.
Others followed. Bluepoint Wind and Golden State Wind took about $900 million in April. Invenergy got $765 million for four leases in June, Duke Energy $129 million for its Carolina lease, and RWE $1.22 billion for three leases in August, tied to $900 million for a Louisiana LNG project and $300 million for gas turbines. The cancelled leases could have held about 19 gigawatts.
The money returns bids that companies paid into the Treasury at auction, which is why critics see a spending decision Congress never voted on. Former Interior officials say no process exists for BOEM to refund lease payments. States have started to sue. A coalition led by New York challenged the TotalEnergies deal in June, and California sued over the Golden State buyout on 28 August.
Where this leaves Congress
The fight explains one clause in the Senate permitting deal. Democrats wanted a rule that agencies can’t pull permits from projects that have finished their reviews, a point covered in our post on S. 5653. The courts have already given the five projects in the water most of that protection, one injunction at a time. For leases that were never built, Interior has found a way around the courts. It pays the companies to leave.