At A Time Of Global Volatility, The US Moves Away From Energy Resilience

On March 23, the Trump administration finalized a “deal” with TotalEnergies, under which the US will pay the French energy firm $1 billion in taxpayer dollars to relinquish offshore wind leases in waters off New York and North Carolina that it acquired in 2022, redirecting its investment into fossil fuel projects instead.

The legality of the approach is quite murky

This is not the first case of offshore wind developers being challenged, halted or delayed since President Trump took office in January 2025. The administration’s longstanding views opposing renewable energy – particularly offshore wind – predate Trump’s second term, but this marks the first time a sitting president has attempted to hinder clean energy development through direct taxpayer payouts rather than policy action.

Similar challenges to those seen in the Ørsted case may arise here. When a wind developer’s lease expires or is abandoned, payments ordinarily flow into the US Treasury rather than back to the developer. The Department of the Interior, which oversees permitting on federal lands and waters, does not have the authority to authorize reimbursement from another federal entity.

There is also speculation about whether the administration might attempt to use the Department of Justice’s Judgment Fund, which is taxpayer-funded and reserved for legal claims and settlements involving federal agencies. Whether this mechanism could apply remains unclear. For now, the outcome hinges on legal scrutiny, the potential for litigation and whether Congressional approval is required.

Global energy market volatility is at a recent high

This deal comes amid significant geopolitical and market pressure. Global energy volatility driven by the war in Iran is rising in tandem with US electricity demand from industrial load growth and data centres. In 2025, wholesale power prices in New York rose 62% year-on-year due to grid congestion and capacity constraints, underscoring how additional clean generation could help mitigate cost increases. At the same time, the administration’s effort to prevent new clean power generation is unfolding when grid stress is at an all-time high (see Verdantix Market Insight: US Energy Transition Investment Trends). Efforts to extend the life of older fossil-fuel-fired power plants through 2028, meanwhile, could cost $3 billion annually.

Globally, the opposite trend is unfolding. Countries are accelerating investments in renewable energy to reduce exposure to fossil-fuel-driven shocks, particularly in Asia. Chinese battery firms BYD, CATL and Sungrow have collectively added more than $70 billion in market capitalization since the start of the war, reflecting renewed confidence in storage-backed renewables. As global capital moves rapidly towards technologies that strengthen energy resilience, the US risks losing ground in markets where leadership is being redefined

So, what are the next steps?

To remain competitive and reduce long-term exposure to energy volatility, US policymakers, utilities and investors must prioritize grid modernization, accelerate clean energy deployment and align capital decisions with global market trajectories. The cost of inaction is rising, and the rest of the world is already moving ahead. For more details on energy resilience, read Verdantix Strategic Focus: Roadmap To Energy Resilience.