Dive Brief:
- Two 25 year leases were sold by the Department of the Interior (DOI) last week on offshore wind development sites near Massachusetts, albeit for sums much lower than previous transactions, Bloomberg reports.
- DOI’s Bureau of Ocean Energy Management (BOEM) says the leases — one to RES America at $1.50 per acre for 187,523 acres and the other to Offshore MW at $1.00 per acre for 166,886 acres — are being incorrectly interpreted as further indication of trouble for U.S. offshore wind. In all, the sales generated $448,000 for 248,000 acres.
- Earlier auctions raised over $14 million for the Cape Wind site in Nantucket Sound as well as for over 357,000 acres closer to shore off Maryland, Virginia, and New England. This auction of 742,000 acres in four zones off Massachusetts to 12 companies produced less lucrative results because deep water sites are more costly to develop, according to a BOEM spokesperson.
Dive Insight:
The U.S. offshore wind industry suffered a setback earlier this month when NStar and National Grid, the two utilities holding PPAs for 77% of Cape Wind’s output, terminated the contracts because the developer missed a deadline to complete financing.
There are about 7 GW of offshore wind installed globally, most in Europe, and 6.6 GW more are in construction, according to the Department of Energy.
None of the 14 U.S. projects in development have started construction although Deepwater Wind’s fully permitted and approved five turbine, 30 MW Block Island Wind Farm off Rhode Island is scheduled to build later this year.
The 468 Cape Wind, which would be the first U.S. utility-scale offshore project, was looking to add debt and equity funding to the $1.5 billion it had secured from the Bank of Tokyo Mitsubishi, Rabobank of Holland, and French investment bank Natixis, and was on track to start construction in the fall when the PPAs were withdrawn. The developer is contesting the utilities’ decision.
