The Trump Administration Pays Billions to Cancel Offshore Wind and Subsidize Coal

Details

Through the first half of 2026, the Trump administration's energy agenda shifted in kind, not just degree. It was no longer only removing climate regulations and clean-energy tax credits; it was spending substantial public money to shut down clean-energy projects and prop up the coal plants those rules once constrained. A Guardian analysis by Dharna Noor, published July 10, 2026, found that the administration had directly spent about $2.7 billion of taxpayer money on its campaign against wind power while pouring roughly $1.125 billion into boosting coal—moves critics say are raising Americans' energy bills even as electricity demand climbs from data centers.

Critics cast the spending as evidence that the president is serving fossil-fuel companies—among those that donated record sums to his campaign—rather than the working-class Americans to whom he pledged lower energy costs. "Trump is getting Americans coming and going," former Washington governor Jay Inslee told the Guardian. "He's forcing higher power bills on them by blocking clean energy, then he's fattening the wallets of his cronies—all with billions of our tax dollars." The administration rejects the premise, arguing it is returning bid money for projects that cannot be built and shoring up a fragile grid.

This entry concerns that direct-spending campaign specifically. It is distinct from, though closely related to, the administration's separate repeal of the EPA's greenhouse-gas endangerment finding, a regulatory and legal action tracked in the endangerment-finding entry. The difference matters: the endangerment repeal's largest effects are contingent on years of litigation, whereas the money described here is already out the door and reshaping the electricity mix regardless of how any court rules.

The Wind Buyouts

Since March 2026, the Department of the Interior has struck four agreements paying energy companies to cancel a total of eight offshore wind projects on legally acquired federal leases—some of them nearly complete—and, in several cases, to pledge investment in fossil-fuel power instead. The first, announced in March with France's TotalEnergies, immediately drew a lawsuit from seven Democratic-controlled states that called it an illegal use of taxpayer money. The most recent, with Duke Energy, was announced in late June.

The Washington Examiner's account of the deals itemizes the roughly $2.7 billion: $928 million to TotalEnergies for two federal-water leases in March; $765 million to Bluepoint Wind and $120 million to Golden State Wind in April; $765 million to Invenergy affiliates for four leases in mid-June; and a $129 million partial reimbursement to Duke Energy in late June.

What makes the campaign notable is its novelty. Previous administrations have canceled or delayed energy projects through permitting, litigation, or regulatory changes, but there is no precedent for the federal government directly paying developers to relinquish legally acquired offshore wind leases, said Jenny Rowland-Shea, senior director for conservation policy at the Center for American Progress. "They are trying to snuff out an entire form of energy," she told the Guardian. "And it's at a time when the United States needs more energy … as people's rates are going up for electricity, as we see datacenters gobbling up more energy." President Trump has separately derided wind power as "ugly" and "disgusting" and called efforts to cut planet-warming pollution a "scam." Despite the pressure, some projects already under construction—Vineyard Wind and Revolution Wind—began delivering power in spring 2026.

The Coal Subsidies

On the other side of the ledger, the administration has spent to keep coal—the most carbon-dense and, by most measures, most expensive fossil fuel—running. In September 2025, the Department of Energy announced $625 million to "expand and extend the life of" coal-fired power plants: $350 million to "modernize" plants, $175 million for coal projects powering rural communities, and $50 million to upgrade wastewater systems to lengthen plant lifespans.

In June 2026, the agency set aside up to $500 million from the Defense Production Act to "expand and reinvigorate" the capacity of 13 coal plants and to help build a coal export terminal in Oakland, California. A week later it announced an additional $3.6 million to "refurbish or retrofit" nine existing coal plants. Those direct grants—about $1.125 billion together—sit atop a wider effort: a $1.5 billion DOE loan in October 2025 to restart and repurpose a coal-gasification plant; a February 2026 executive order directing the Pentagon to purchase electricity from coal plants; and DOE emergency orders forcing aging plants to stay open past their planned retirement dates, with the costs passed to ratepayers.

The administration has also made coal cheaper to extract. Through a provision in the One Big Beautiful Bill Act, officials lowered the royalty rate on federal coal from 12.5% to 7%, cutting what coal companies pay the federal government and states to mine on public lands—a change Wyoming alone estimates could cost it $50 million a year. The market's verdict on the broader push was blunt: at the largest U.S. coal leasing sale in over a decade, held in October 2025, the only bid amounted to one-tenth of a penny per ton, and was rejected. "Even though the bid was ultimately rejected, the failure of this coal sale demonstrates the Trump administration's willingness to use significant resources to subsidize a dying industry," Rowland-Shea said.

The Bill for Ratepayers

Critics argue taxpayers are likely to pay twice: first through the billions in direct spending, then through higher electricity bills as utilities lean on more expensive coal instead of cheaper renewables. The underlying economics are lopsided. A 2023 report from Energy Innovation found that 99% of domestic coal-fired plants cost more to run than it would cost to replace them with renewable power, and the group found that generating power with coal in 2024 cost 28% more than the same amount would have in 2021. Coal plants are also more expensive to build and run than renewable alternatives, according to Lazard's levelized-cost analysis.

A 2025 analysis from Grid Strategies estimated that if all 35,000 megawatts of large fossil plants scheduled to retire by 2028 were instead kept running, ratepayers would bear at least $3.12 billion in costs by the end of 2028. The public-health stakes compound the economic ones: a 2023 Harvard study estimated that as many as 460,000 U.S. deaths from 1999 to 2020 were attributable to fine-particle pollution from coal plants alone. "Coal has largely died because of economics, and so forcing it to stay afloat is not a good energy decision, and not a good economic decision for taxpayers," Rowland-Shea said. Gabrielle Levy of the Climate Action Campaign put it similarly: "We're paying as taxpayers to keep economically unviable plants open, and meanwhile those are doing immeasurable harm to the local environment, to people's health, and to the climate, which costs us more, too."

The Legal Fight

The spending has already reached the courts. The TotalEnergies agreement drew a lawsuit from seven Democratic-controlled states, filed in June 2026, alleging that paying to cancel the leases is an illegal use of taxpayer money. Democratic attorneys general have argued the payments violate the Outer Continental Shelf Lands Act, which requires hearings before federal leases can be canceled. The dispute turns in part on a semantic question with real legal stakes: whether the money is a "return" of bid deposits, as the White House contends, or a payment out of public funds, as the states argue. Because bid money from energy leases on public waters goes into public accounts, Rowland-Shea said, "they can use the word return, but they are paying the companies not to produce this energy or to give taxpayers what was promised."

The Administration's Case

The administration defends the coal spending as a matter of grid reliability and the wind cancellations as fiscally neutral. Energy Department spokesperson Ben Dietderich said the administration is "proud" of its efforts to boost coal, blaming the "Green New Scam" of clean-energy subsidies for the "premature shutdown" of fossil plants, higher energy costs, and increased blackout risk. "It's worth noting that states with their own anti-coal and gas policies experienced the highest price increases during that time period," he said—though there is evidence that renewables can lower energy costs.

On the wind payments, White House spokesperson Taylor Rogers said officials were "not spending taxpayer dollars on these deals." "The administration is returning the money that companies bid on offshore wind projects that are unable to be built due to national security concerns, and those companies are voluntarily redirecting those returned bid amounts to energy projects that will provide affordable, reliable, and secure energy," she said, adding that "the Biden administration lured companies into these projects with the promise of millions of taxpayer dollars in subsidies." Rogers separately argued that without subsidies, offshore wind projects "are not only the costliest source of power, but also the least dependable." Some conservative commentators have defended the wind rollback on the merits, arguing the offshore buildout was a Biden-era mistake worth unwinding—editorial advocacy rather than independent analysis. The reliability concern is not frivolous given surging data-center demand, but the administration's central factual claim—that this involves no public spending—is precisely what the litigation contests.

Where This Stands

As of mid-2026, four wind buyout deals had been signed and the coal grants disbursed or committed, with the direct spending totaling close to $3.8 billion across the two campaigns. Unlike the endangerment-finding repeal, whose largest consequences wait on litigation expected to reach the Supreme Court, this spending operates immediately and independently of the courts. The seven-state lawsuit may test the legality of the wind payments, but even a favorable ruling would not automatically rebuild canceled projects or unwind coal commitments already made. Inslee framed the whole package as a "mugging": "We pay more, Republicans rubber-stamp it, and Trump's donors walk off with the bag." The administration frames it as returning bid money and keeping the lights on. What is not in dispute is the direction: billions in public resources deployed to remove cheap generation from the grid and sustain more expensive plants the market was retiring, with the cost difference, analysts calculate, landing on ratepayers.