Energy Market Update - Sustainability Corner

LevelTen Energy’s snapshot on U.S. and EU Power Purchasing Agreement (PPA) pricing is below. For more information on LevelTen please visit www.leveltenenergy.com.

Intro Section:

The Trump administration reached a settlement with TotalEnergies to buy out more than 4 GW of U.S. offshore wind leases, reimbursing the company nearly $1 billion while redirecting that capital toward domestic oil, gas, LNG, and gas‑fired power development. Separately, federal courts allowed five previously halted offshore wind projects to proceed after the administration dropped appeals of injunctions blocking its stop‑work orders, quietly conceding weak legal footing while enabling the first large‑scale U.S. offshore wind facilities to continue construction and generation. In parallel, the EIA forecast a 17% increase in U.S. solar generation this summer amid rising electricity demand, underscoring continued renewable growth even as fossil fuel generation remains flat and coal output declines.

March 23, 2026: Trump Administration Buys Out TotalEnergies Offshore Wind Leases – Company Redirects Capital to U.S. Oil, Gas, and LNG

• TotalEnergies agreed to relinquish two U.S. offshore wind leases totaling more than 4 GW of planned capacity, the 3 GW Attentive Energy project in the New York Bight and the 1.2 GW Carolina Long Bay project off North Carolina, under a settlement with the U.S. Department of the Interior. The federal government will reimburse the company $928 million, roughly equal to what it paid for the leases in 2022.
• In exchange, TotalEnergies committed to reinvest the reimbursed funds into U.S. fossil and gas assets, including development of Train 1–4 at the Rio Grande LNG export facility in Texas, increased upstream oil production in the Gulf of America, shale gas development, and additional gas-fired power generation to serve rising electricity demand, including from data centers.
• The settlement reflects a broader Trump administration effort to curtail offshore wind development after unsuccessful attempts to halt other East Coast wind projects through stop-work orders that were overturned in federal court. Administration officials framed the buyout as ending taxpayer support for “unaffordable” and “unreliable” offshore wind, while promoting domestic energy production tied to oil, gas, and LNG exports.
• The deal materially reduces the near to medium term U.S. offshore wind pipeline and continues to signal heightened political and regulatory risk for capital-intensive offshore wind projects, even those with advanced permitting status such as FAST‑41 coverage. For clean energy developers and supply chains, the action underscores increased uncertainty around offshore wind policy durability, while reinforcing near-term federal preference for fossil fuel–aligned infrastructure over large-scale offshore renewables.

April 10, 2026: Courts Allow Five Offshore Wind Projects to Proceed as Trump Administration Drops Appeals

• The Trump administration allowed court deadlines to lapse on appeals of federal injunctions blocking stop‑work orders for five offshore wind projects, effectively permitting construction to resume and continue. The projects, located off Massachusetts, Long Island, and Virginia, had been paused in December on asserted national security grounds before developers successfully challenged the action in federal court.
• The decision clears the way for the first wave of large‑scale U.S. offshore wind projects to move forward, with several already generating electricity. Vineyard Wind (CIP & Avangrid), Revolution Wind (Orsted), and Coastal Virginia Offshore Wind (Dominion) have begun producing power, and collectively the five projects are expected to supply electricity to more than 2 million homes once completed.
• The lack of appeals signals a tacit acknowledgment of limited legal footing for federal intervention in permitted offshore wind projects, undermining the administration’s earlier claims that the developments posed national security risks. Former Interior Department officials and industry observers view the move as evidence that those arguments were unlikely to survive further judicial scrutiny.
• This development may reopen momentum for bipartisan permitting reform and modestly improve the outlook for future offshore wind development, even as broader policy headwinds and the Total Energies offshore wind deal remain. By stepping back from further litigation, the administration potentially revives congressional talks on permitting reform aimed at insulating energy projects from political intervention, while highlighting ongoing risks tied to federal permitting timelines and regulatory uncertainty for capital‑intensive clean energy projects.

 April 13, 2026: Solar Generation to Rise 17% This Summer, according to the EIA

• U.S. solar generation is projected to rise 17% this summer compared with 2025, helping meet higher peak demand during the hottest months, according to EIA’s April Short‑Term Energy Outlook. Other renewables are also expected to grow, with hydropower up 6% and wind generation up 5% relative to last summer.
• The agency said, “In the summer of 2027, we expect solar generation will grow by 22% to reach 178 BkWh, surpassing wind generation by almost 30%, although we still expect wind will generate more electricity than solar for the whole year.”
• The output of other resources will remain more constant. EIA data show gas‑fired generation rising modestly from 1,702 billion kWh in 2025 to 1,704 billion kWh this year, before increasing to 1,774 billion kWh in 2027. Coal generation is expected to fall from 733 billion kWh to 658 billion kWh over the same period, while nuclear output remains relatively steady at just under 800 billion kWh.
• Electricity demand continues to increase, with total U.S. power sales forecast to rise 1.2% in 2026 and 3.3% in 2027; summer demand alone is expected to grow 2.3% this year.

CAISO: California Cap and Invest Program: 2026 Amended Regulations

• Program overview: Covers ~80% of California’s GHG emissions across ~400 facilities and has generated ~$35 billion for the Greenhouse Gas Reduction Fund since inception.
• Context for amendments: Builds on January 2026 updates and responds to near‑term economic headwinds, including federal policy disruption, loss of federal incentives, and market volatility.
• Ratepayer relief: Proposal to expand the California Climate Credit for electricity customers from $8 billion to $10 billion through 2030.
• Industrial support: Proposal to double the Manufacturing Decarbonization Incentive (MDI) by providing $4 billion in additional free allowances for in‑state manufacturers and refiners.
• Post‑2030 design: Proposed removal of post‑2030 allowance allocations from the current rulemaking to allow further stakeholder engagement, while retaining emissions caps through 2045.

PJM: New Jersey Governor Signs Nuclear Bill, Names Members to Nuclear Task Force

• Gov. Mikie Sherrill signed S3870 into law. The law lets NJ DEP approve permits for nuclear generation facilities if radioactive waste storage/disposal is safe and meets NRC standards, removing a long-standing barrier to new nuclear development in NJ.
• Sherrill Administration is pursuing new nuclear and exploring solar, battery storage, and modernization of existing natural gas generation.
• Sherrill announced a Nuclear Task Force (under Executive Order 2) to advance NJ’s pursuit of new nuclear energy.
• Task Force focus areas: Financing; Supply Chains & Technology Development; Workforce Growth & Training; Regulatory & Permitting Framework; Public Trust & Confidence.

NYISO: New York Lawmakers Approve Second Budget Extender

• On 4/7 New York State lawmakers approved a second one-week budget extender to keep government funded while negotiations continue.
• Gov. Kathy Hochul’s proposed $263 billion budget remains unresolved more than a week after the 3/31 deadline.
• Key sticking points: Hochul’s push to scale back implementation of the state’s 2019 climate law; proposed car insurance law changes aimed at reducing premiums; and competing tax positions.
• Negotiators are exploring potential compromises despite the disputes.