Dive Brief:
- The Bureau of Ocean Energy Management's first-ever auction for wind energy leases off California’s coast garnered $402.1 million in bids at the end of its first day.
- BOEM on Tuesday put up for auction five leases that could support up to 4.6 GW of floating turbines more than 20 miles off California’s northern and central coasts.
- The California auction is not expected to generate as much revenue as the one off New York and New Jersey last February, which yielded $4.4 billion. “Today, the California market is not as strong, and adding in new technology development will likely result in a lower price,” the Business Network for Offshore Wind said in a Tuesday statement.
Dive Insight:
BOEM put on the auction block five leases covering 373,300 acres for floating turbines in the deep Continental Shelf miles off California’s Morro Bay and Humboldt Bay.
“Offshore wind is a critical component to achieving our world-leading clean energy goals and this sale is an historic step on California’s march toward a future free of fossil fuels,” Gov. Gavin Newsom, D, said in a statement Tuesday.
Being auctioned are three leases for 3 GW of wind energy off California’s Central Coast and two leases for 1.6 GW off the Northern California Coast. Minimum bids were set at $100 per acre.
“After many years of planning, this is an exciting milestone in the process,” said Matthew Marshall, executive director of the Redwood Coast Energy Authority, or RCEA. He has been working on offshore wind development in Humboldt Bay for several years.
The auction will continue as long as there is active bidding, BOEM spokesperson John Romero said Tuesday morning. Results could be released as early as Dec. 7.
The leases for floating turbines off the Golden State’s coast “will immediately put the U.S. at the forefront of a rapidly advancing new industry with the opportunity to emerge as a true global leader,” said Melinda Skea, spokesperson for the Network for Offshore Wind.
California’s ocean is much deeper than most other areas with developed and emerging offshore wind industries, requiring large floating wind turbines moored to the seafloor in place of fixed platforms or towers. Floating turbines, which are more expensive, work in water depths between 1,300 feet to 4,300 feet, according to BOEM.
Floating wind turbine developers outside the U.S. are expected to participate in the West Coast market, including Corio, SSE, BW Idol, Aker, Mainstream, and Hexicon, said the Business Network for Offshore Wind.
Bids flood in
As of late Tuesday afternoon, BOEM reported there were nearly 40 bids for the three leases beyond Morro Bay on the central coast and more than 30 for turbines for two leases outside Humboldt Bay. RCEA’s Marshall said there were six bidders.
The California auction is not expected to be as strong as the East Coast one, but that will change over time due to its prime market and “strong political and public support,” according to Skea.
The California auction is BOEM’s third of seven planned auctions before 2025. It is part of the Biden administration’s plan announced in May to bring online more than 30 GW of offshore wind energy on the East and West coasts by the start of the next decade, with half from floating turbines by 2035. Biden seeks to enable 100% clean electricity by 2035 and a net-zero-emissions economy by 2050.
The same day as the start of the auction, the U.S. Department of Energy released a $28 million funding opportunity to lower costs and barriers to offshore and land-based distributed wind energy deployment. Nearly $17 million is for technologies needed to transmit large amounts of electricity from offshore wind farms and research and community engagement
