NC offshore wind project canceled as $1B deal shifts investment to fossil fuels

A planned offshore wind project off North Carolina’s coast that could have powered roughly 300,000 homes has been scrapped after the federal government agreed to spend nearly $1 billion to halt its development, a decision that is drawing sharp reactions and raising questions about future energy costs in the state.

Under the agreement, the French energy company TotalEnergies will be reimbursed for leases it purchased in federal waters near Bald Head Island. In exchange, the company will redirect that investment into oil and natural gas projects, including liquefied natural gas (LNG) production.

The move comes as electricity demand in North Carolina and across the Southeast is rising, driven by population growth and the rapid expansion of energy-intensive data centers.

Energy analysts say removing a major potential source of power from the pipeline could have lasting implications.

“I think folks are trying to figure out how to reconcile this with the fact that we do need more electrons on the grid,” said Katharine Kollins, president of the Southeastern Wind Coalition. “Every state right now is looking at how we can develop more energy, not how we should be taking options off the table.”

The canceled project, known as Carolina Long Bay, was one of two offshore wind developments TotalEnergies had planned along the East Coast. The North Carolina portion alone would have generated about 1,300 megawatts of electricity and brought significant economic development to the region.

State leaders were quick to criticize the decision. In a post on X, Gov. Josh Stein said the Trump administration is “spending nearly $1 billion in taxpayer money to pay off a company to stop investments in the clean energy we need,” calling it “a terrible deal for the people of North Carolina and our country.”

The Interior Department, which negotiated the agreement, defended the move, saying offshore wind projects are too costly and unreliable to meet the nation’s energy needs. In a statement, officials said redirecting investment toward natural gas would provide “affordable, reliable and secure energy” while strengthening grid stability.

The debate reflects a broader divide over how to meet growing electricity demand while keeping costs down.

Offshore wind projects typically require high upfront investment but have no fuel costs once operational. Fossil fuel plants rely on fuel that can fluctuate in price.

“Using a billion dollars of taxpayer money to remove an option for North Carolina and then require that company to invest in LNG just doesn’t feel right,” Kollins said.

She and other advocates argue that offshore wind could help stabilize energy prices over time by diversifying the state’s power mix, particularly during periods of high demand or fuel volatility.

The federal government and industry leaders backing the deal say natural gas offers a more dependable source of power, especially as the grid faces increasing strain.

Part of that shift now points to LNG, which is traded on a global market. That means prices can rise or fall based on international demand, geopolitical tensions and export levels — dynamics that do not affect wind energy.

The cancellation also highlights uncertainty around offshore wind development in North Carolina. Duke Energy, the state’s largest utility, holds a neighboring lease in the same area but paused development last year as it reevaluated costs and policy conditions.

As state regulators and utilities map out how to meet future demand, the loss of Carolina Long Bay narrows the range of options.

For residents, the stakes may ultimately show up in monthly bills.

“When we limit our choices,” Kollins said, “we limit our ability to control costs.”