Published on December 17th, 2018 | by Joshua S Hill0
US DOI Awards Offshore Wind Leases Worth Up To 4.1 Gigawatts Off Massachusetts
December 17th, 2018 by Joshua S Hill
The US Government has awarded new offshore wind leases off the coast of Massachusetts that are said to be worth over $405 million and which have the potential to develop up to 4.1 gigawatts of offshore wind.
The US Bureau of Ocean Energy Management (BOEM), a part of the US Department of the Interior which is run by Secretary Ryan Zinke — one of several Trump Cabinet Members under Federal investigation by the Department of Justice — announced on Friday the results of its eighth offshore wind lease auction for approximately 390,000 acres offshore Massachusetts.
In the end, three provisional winners were announced, with bids worth a combined $405 million for total potential developmental capacity of 4.1 GW of commercial offshore wind generation — which would be enough to power the equivalent of nearly 1.5 million homes.
“To anyone who doubted that our ambitious vision for energy dominance would not include renewables, today we put that rumor to rest,” said Secretary Zinke. “With bold leadership, faster, streamlined environmental reviews, and a lot of hard work with our states and fishermen, we’ve given the wind industry the confidence to think and bid big.”
Secretary’s Zinke’s outlook was emphasized by the title given to the Department of the Interior’s (DOI) press release announcing the results of the auction, entitled “BIDDING BONANZA! Trump Administration Smashes Record for Offshore Wind Auction with $405 Million in Winning Bids” — capital letters and all. One wonders, however, just what records the DOI thinks have been smashed, considering how little offshore wind has been developed and awarded in the United States to date.
Currently, the United States only operates one single offshore wind farm — the 30 megawatt (MW) Block Island Wind Farm off the coast of Rhode Island, which was brought online in December of 2016. And while the last 18 months have seen the United States offshore pipeline expand dramatically — to as much as 25.5 GW, according to the Department of Energy in July — this was made up of only 3.9 GW of project-specific capacity, with a further 21.5 GW worth of undeveloped lease area potential capacity. The second half of 2018 saw several new projects announced along the Atlantic Coast, including Massachusetts, Rhode Island, and New Jersey, with other states like Virginia and South Carolina also eyeing potential development or manufacturing plans.
The provisional winners of this latest auction include Norwegian multinational energy company Equinor; Mayflower Wind Energy, a Royal Dutch Shell and EDP Renewables joint venture; and US-based offshore wind development company Vineyard Wind, which already boasts the 800 MW Vineyard Wind Offshore Wind Farm that recently won energy and renewable energy credit pricing well-below analyst expectations, and announced MHI Vestas as its preferred wind turbine supplier.
A total of 11 companies apparently competed in the offshore wind lease auction, and each winning bid came in at around $135 million (two at $135 million, one at $135.1 million).
|Provisional Winner||Lease Area||Acres||Winning Bid|
|Equinor Wind US, LLC||OCS-A 0520||128,811||$135,000,000.00|
|Mayflower Wind Energy, LLC||OCS-A 0521||127,388||$135,000,000.00|
|Vineyard Wind, LLC||OCS-A 0522||132,370||$135,100,000.00|
The winning bids far exceeded the previous record bid for a single lease area, which was set by Equinor (then Statoil, before its name change) of $42.5 million.
“The intense competition we’ve seen in this offshore wind lease auction is completely unprecedented,” said Nancy Sopko, Director, Offshore Wind, for the American Wind Energy Association (AWEA). “With strong support from Secretary Zinke, Massachusetts and other states, global businesses now recognize the potential of America’s world-class offshore wind resources. Today’s biggest winners are the American workers who will help build and operate these wind farms and the consumers who will soon have access to a new large-scale source of clean, reliable electricity.”
“This historic auction clearly demonstrates investor confidence in America’s offshore wind market, thanks to the leadership of states like Massachusetts, New York, and New Jersey that have set long term, large scale commitments to finally bring this critically needed climate solution online,” added Collin O’Mara, president and CEO of the National Wildlife Federation. “The fierce competition in today’s auction makes clear that the booming global offshore wind power industry sees a prosperous future in U.S. waters — one that will replace retiring power plants with affordable, reliable energy and create tens of thousands of domestic jobs in the process. The National Wildlife Federation applauds the Bureau of Ocean Energy Management for a successful auction and congratulates Equinor Wind, Mayflower Wind Energy, and Vineyard Wind for securing these new leases. Looking forward, we will continue to work with all leaseholders to ensure that coastal and marine wildlife are protected throughout every stage of the offshore wind development process.”
Each of the winning bidders will now have an opportunity to explore the potential development of their successfully won lease sites. The full potential of a site is not always going to be maximized, but in a time and place where offshore wind technology prices continue to fall, the winning companies have the opportunity to utilize some of the latest and biggest wind turbines to maximize the potential of their wins.
“We are excited to have secured this attractive opportunity, Equinor’s second offshore wind lease in the United States,” said Christer af Geijerstam, President of Equinor Wind US. “This acquisition complements our existing position on the US East Coast and gives us a foothold to engage in the Massachusetts and wider New England market, a region notable for its strong commitment to offshore wind.”
Mayflower Wind Energy has the potential of developing approximately 1.6 GW, according to the announcement from parent company, EDP Renewables.
“Mayflower’s entry into US offshore wind is exciting and will leverage Shell and EDPR’s years of combined wind development and offshore experience,” said John Hartnett, Director, Mayflower. “We commend BOEM on a successful bid round and look forward to working with local groups and communities to realize this opportunity.”