$405 million spent on offshore sites

During federal lease auction
Thu, 01/10/2019 - 4:15pm

A joint venture of three offshore wind energy companies combined to bid a record-breaking $405 million during a federal lease auction that concluded on Friday, Dec. 14. The leased sites are located between Block Island and Martha’s Vineyard; 44.5 nautical miles from Block Island, 19.8 nautical miles from Martha’s Vineyard, and 16.7 nautical miles from Nantucket.

Stephen Boutwell, spokesman for the Bureau of Ocean Energy Management, said the 32-round bidding process began on Dec. 13 with 11 of 19 qualified bidders submitting bids for 390,000 total acres of offshore property. “From our perspective,” he told The Times, “it shows strong industry interest in developing offshore wind in the United States.”

The three companies with the winning bids are: Equinor Wind US, LLC, Mayflower Wind Energy, LLC and Vineyard Wind, LLC, who each bid $135 million. Boutwell said, “If fully developed, the areas could support approximately 4.1 gigawatts of commercial wind generation, enough electricity to power nearly 1.5 million homes.” He noted that wind energy companies leasing offshore sites would have 33 years to construct and operate their wind farms.

Boutwell said Equinor Wind held the previous lease auction record with a high bid of $42 million for a site located off New York’s coast in 2017. According to its website, the energy company, which now deals in oil, gas, wind and solar, changed its name from Statoil on May 15, 2018, to transition from being an oil and gas company.  

Boutwell said the total potential for offshore wind generation off Rhode Island and Massachusetts, due to offshore wind companies leasing federal sites, is 9.5 gigawatts of capacity. He added that BOEM’s leasing process “is a collaborative effort,” and the federal agency looks forward to working with everyone throughout the process. “We encourage active participation to make the best decisions possible.”

According to BOEM’s press release, the federal agency has 15 active offshore wind leases, with proceeds being deposited into the United States Treasury. “These lease sales have generated more than $473 million in winning bids for nearly two million acres in federal waters.” 

The press release notes: “Before the lease agreement is executed, the Department of Justice and Federal Trade Commission will conduct an anti-competitiveness review of the auction, and the provisional winner will be required to pay the winning bid and provide financial assurance to BOEM. The lease will have a preliminary term of one year, during which the lessee may submit a Site Assessment Plan to BOEM for approval. The SAP will describe the facilities (e.g., meteorological towers or buoys) a lessee plans to install or deploy for the assessment of the wind resources and ocean conditions of its commercial lease area.”

“Following approval of a SAP, the lessee will have four and-a-half years to submit a Construction and Operations Plan (COP) to BOEM for approval. This plan will provide a detailed proposal for the construction and operation of a wind energy project within the lease area. If BOEM approves the COP, the lessee will then have a term of 33 years to construct and operate the project.”

Due to the federal government shutdown, BOEM has limited operations, and has cancelled meetings. Its website says for more info visit: doi.gov/shutdown.