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The company said it determined that there was “no path forward to permit these projects in the U.S. for the foreseeable future.” The deal marks the first lease relinquishment in the Humboldt Wind Energy Area and expands the federal retreat from California offshore wind development beyond the Morro Bay area. The proposed Canopy Offshore Wind project had an estimated potential capacity of approximately 1.6 GW.

The agreement with the U.S. Department of the Interior covers RWE offshore wind leases off California, New York and Louisiana. The company plans to redirect approximately $900 million toward an investment in a liquefied natural gas project in Louisiana and another $300 million to support natural gas generation projects in the United States.

The California lease, OCS-P 0561, is held by RWE subsidiary Canopy Offshore Wind LLC and covers approximately 63,338 acres in federal waters off Humboldt County. RWE won the lease in the Bureau of Ocean Energy Management’s December 2022 California offshore wind auction and subsequently assigned it to Canopy Offshore Wind.

BOEM awarded five California offshore wind leases in 2022—three in the Morro Bay Wind Energy Area and two in the Humboldt Wind Energy Area. At the time of the auction, BOEM estimated that the five lease areas collectively had the potential to support more than 4.6 GW of offshore wind generation. Subsequent state planning estimates have placed the potential capacity of the five lease areas at approximately 4.5 to 7.6 GW as projects and technology have developed.

California has established a planning goal of developing up to 25 GW of offshore wind capacity by 2045. The California Energy Commission (CEC) estimates that offshore wind could provide approximately 10% to 15% of the state’s electricity needs.

Three of those original five leases are now subject to federal agreements to remove them from development.

In April 2026, Golden State Wind LLC agreed to relinquish its Morro Bay lease in exchange for a $120 million federal payment. The lease had been intended to support a proposed 2-GW floating offshore wind project.

In June, Invenergy agreed to relinquish four offshore wind leases, including its Morro Bay lease, under a $765 million federal agreement. Invenergy had estimated that its California lease could support approximately 1.5 GW of capacity.

California has challenged both Morro Bay lease relinquishment agreements. Attorney General Rob Bonta and the CEC have issued notices of intent to sue the Interior Department, arguing that the federal government violated the Outer Continental Shelf Lands Act and improperly circumvented California’s role in offshore energy decisions.

The RWE agreement could now provide the basis for a third California challenge, although the state has not yet announced a notice of intent to sue over the Humboldt lease.

The Humboldt withdrawal could also have broader consequences than the two Morro Bay cancellations because California has been planning significant infrastructure investments around development of an offshore wind industry along its northern coast.

The state has spent more than $100 million preparing ports, transmission systems and other infrastructure for offshore wind development. The CEC has also funded planning and improvements at Humboldt Bay as part of a broader effort to create port infrastructure capable of supporting floating offshore wind projects.

The loss of the Canopy project leaves only one of the two original Humboldt leases in the development pipeline and raises questions about the scale and timing of the commercial offshore wind industry needed to support those investments.

It also further complicates California’s 25-GW target, as the CEC’s offshore wind strategic plan would likely have required additional federal lease areas to reach the state’s 2045 goal.