Powerstack: The sunk cost of offshore wind

Happy almost Fourth of July, or tax credit safe harbor day, to those who celebrate 🇺🇸 Read on for a deep dive into Trump’s latest offshore wind deal, and what it shows about the state of power in the whole country.

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The Trump administration struck its fifth offshore wind lease buyout deal this week, this time paying Duke Energy $129m to voluntarily terminate its lease off the coast of North Carolina. Construction hadn’t yet begun on the site, which Duke paid $155m for in 2022. The power company will redirect the funds toward grid upgrades and new generating capacity, like natural gas or advanced nuclear, across the Carolinas.

Duke joins the growing list of companies that have taken similar federal buyouts: 

Combined, the administration has now committed roughly $2.7bn to unwinding offshore wind leases. 

It’s part of the administration’s "pay to not play" strategy, born out of necessity after the administration's original attempt to halt permitted projects already under construction on national security grounds has already failed in federal court roughly six times, which pushed the buyout approach as an alternative. Five projects already under construction survived by winning court injunctions after the December stop-work orders:

Still, these lease buyouts might be less meaningful than they sound. Duke had already shelved its development plans in August 2025, citing "significant external policy and market headwinds and uncertainty.” Read, the administration’s campaign against wind and rising interest rates. Duke’s October 2025 integrated resource plan proposed 40GW of new capacity additions through 2040 with no wind anywhere in it. So, Duke had already scrubbed the plan, but on Monday got paid $129m to make it official.

Like Duke, for many of the developers, this is found money for things they were likely to have done anyway. Getting firm power like gas and nuclear online fast is still the dominant story in every resource plan right now, buyout or not.

I wanted to be upset about this deal.

I want a thriving US offshore wind sector. I want low carbon energy. And to me and so many others, the administration’s attack on wind as a culture-war issue is, well, absurd.

But here’s the thing. In the market we’re in right now, these buyouts actually make sense – it’s just a shame they have to be dressed up as sticking it to wind. 

This isn’t really about losing wind capacity, but more about reallocating capital to firm power.

As in most things, just follow the money. Every developer that took a check is redeploying into firm power. Total and Bluepoint into Gulf Coast LNG, Duke into gas and advanced nuclear, Invenergy into gas and geothermal. What’s really going on is the administration is paying to convert leases of intermittent power into buildout of firm capacity – effectively subsidizing firm power.

But why does this reallocation work, and not, for example, a war on solar? It’s really because of who holds the offshore wind leases. Nearly all of them have gobs of optionality. Ørsted, Equinor, RWE, EDF/Shell, TotalEnergies, bp, Invenergy, CIP, and financials like GIP and CPPIB are almost all diversified across LNG, gas, or solar+storage. If it were all pure-play solar developers or offshore developers, you’d get more of a fight. With this group, they’ll move to other projects that are in demand right now. For them, the "pay not to play" is frictionless.

But for me, Invenergy in particular is interesting. Yes, it’s one of the biggest recipients of the buyout, and will very likely put a lot of that $765m to work building gas generation capacity. But same time, according to Currence analysis, it has spent nearly $5m across 47 federal geothermal parcels in six states since October 2024, most of it before any of this. The wind buyout isn't pushing Invenergy into geothermal. But rather, it’s helping fund exploration drilling.

Maybe the president is actually anti-wind, but this move by the administration doesn’t seem to really be driven by that – but it’s more a move for pro-firm.

Going forward, I'm watching three things. The first is what the capital from these buyouts actually goes to – sure, some recipients have named specific LNG projects. But I’m really curious about how much of it results in actual geothermal or SMR capacity – clean-firm, baby! Next, how much of a fight there actually is – whether the pure-play wind developers with no exit start folding or fighting. And finally, whether offshore wind is dead in the US, or whether a future administration just got a clean slate of leases to auction again.

A quick read on the numbers shaping the market. The capex, the contracts, the regs, all anchored in the so-what.

16.6GW // PJM's forecast demand for July 2, an all-time record. DOE issued back-to-back emergency orders June 30 authorizing PJM to curtail data centers and large loads over 50MW and waive pollution limits on power plants through July 3, as a severe heat wave pushes highs into the 100s across the Mid-Atlantic. It's the clearest live test yet of whether large loads get treated as a dispatchable resource under stress, and a preview of how the FERC show-cause orders on large load curtailment could play out in practice.

16GW // Headline capacity in Tesla, Sunrun, and Renew Home's new VPP coalition targeting hyperscaler offtake. The framework pools diverse resources, with Renew Home's 8m+ smart thermostats and Sunrun and Tesla's residential battery fleets. A data center would contract flexible capacity from nearby residential DERs, with the utility dispatching the VPP during stress events instead of curtailing the load. No offtake agreements signed yet, but the coalition has already bid over 1GW into PJM's proposed Reliability Backstop Procurement. It’s a massive volume for VPPs, but it’s existing installed capacity repackaged as "capacity-as-a-solution” with paths to accreditation. 

$25bn // Brookfield’s cash infusion into Bloom Energy, a 5x expansion since October 2025. The cash is coming from Brookfield's $100bn AI Infrastructure Fund, and shows a vote of confidence in Bloom’s natural gas fuel cells. They can be quickly deployed onsite at data centers that want to skip the interconnection queue and often, get an air permitting exception, a big speed to power play.

$33.4bn // Enterprise value of AES, as shareholders approve take-private. The all-cash deal pays $15.00 a share and values AES at $10.7bn in equity and $33.4bn enterprise value including assumed debt. Financing is 100% equity from GIP (now part of BlackRock), EQT Infrastructure VI, CalPERS, and QIA, with no new debt raised, still pending regulatory sign-offs. It's the latest in a wave of PE snap-ups of renewables developers with data center-adjacent, tax credit safe-harbored backlogs.

$71m // Indiana's new AES utility rate hike. It prompted Gov. Braun to fire a commissioner, citing concerns about affordability. Even though the utility AES already told the IURC in March that its pending $33.4bn take-private "does not increase AES Indiana's electric rates" and that no transaction costs will be recovered from ratepayers, it shows the political risks that are increasingly coming with the territory. 

Explore more Signals on Currence here.

The policies, rulings, and company moves worth watching.

KKR's $4.2bn bet on EDF's US and Canada renewables. KKR agreed to buy EDF's North American power solutions arm, a 5.6 GW portfolio of solar, wind, and storage assets, with EDF trimming about $5.5bn in net debt from the sale. The deal is KKR's largest single renewable energy deployment to date and lands as EDF continues shedding non-core international assets under its state-backed restructuring. EDF, Ørsted, Iberdrola, and TotalEnergies are also all rotating out of US exposure, leaving these big opportunities for PE.

Mainspring Energy testing the IPO waters. The on-site linear generator maker has hired Goldman Sachs to weigh a public listing, with a SPAC reportedly still on the table as an option. Mainspring has raised nearly $800m in venture funding on the pitch that its fuel-flexible generators can plug straight into the speed-to-power problem utilities are struggling to solve. 

The Supreme Court rules on agencies’ independence. In a 6-3 ruling in Trump v. Slaughter, the justices overturned the 91-year-old Humphrey's Executor precedent, giving the president the power to remove commissioners at independent agencies without cause. There’s implications at NRC, where Trump already replaced the commissioner, and possibly for FERC. Former FERC commissioners had warned in an amicus brief that this would "bulldoze the structural supports" Congress has to keep ratemaking free from political pressure.

A new LBNL framework for wiring resilience into distribution planning. Berkeley Lab reviewed 22 utility distribution system plans across 16 jurisdictions and built a framework identifying seven points where resilience planning and distribution system planning should intersect, but currently don't. More than 30 states require utilities to file distribution plans, resilience plans, or both, yet the report finds only a handful require the two to actually talk to each other. It also includes case studies on pole hardening and microgrids for utility planners

The latest research, features, and data drops on the Currence platform.

Our latest report, Offtake to Online: How corporates drive innovation, delivers a handbook on how early corporate commitments unlock vital project finance and secure future supply chains. With deep dives into contract structures, case studies, and more, you can get it here. 

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