Dive Brief:

• The Bureau of Ocean Energy Management (BOEM) will hold a lease auction in the New York Bight on Feb. 23 for six bidding areas for the development of up to 7 GW of offshore wind, Interior Department Secretary Deb Haaland announced on Wednesday.
• The auction is one piece of a variety of activities the Biden administration is coordinating to encourage clean energy deployment while continuing to press for the passage of the Build Back Better bill. The Department of Energy also announced an initiative to support the buildout of transmission by improving permitting processes, coordinating with state governments and other stakeholders, and financing transmission lines and grid updates.
• BOEM plans to hold up to four other separate lease sales this year, including off the coast of the Carolinas. On Tuesday, the agency opened a public comment period for an environmental assessment of offshore wind leasing near Northern California and began preparing a draft environmental assessment for offshore wind leasing in the Gulf of Mexico.

Dive Insight:

The Department of the Interior announcements follow a timeline through 2025 that Haaland shared in October to increase lease sales for offshore wind as the administration progresses toward its goal to deploy 30 GW by 2030.

According to the plan, BOEM is also slated to auction new lease areas off of the Carolinas, in the Gulf of Mexico and off the coast of northern California in 2022. This year, BOEM also expects to designate lease areas in the Central Atlantic (above the Carolinas area) and off the coast of Oregon.

By 2025, BOEM plans to also hold lease auctions for development in the Gulf of Maine, in the Central Atlantic and the Oregon coast.

"That sort of forward-looking transparency, beyond 30 GW, towards [the Biden administration's] long-term goal of 110 GW by 2050, those are the market signals that are really, really important to investors to not only spark initial investment but to give them confidence that there's a ... sustainable market that they can build around and continue to have confidence in," said Sam Salustro, director of coalitions and partnerships in Maryland for the Business Network for Offshore Wind.

BOEM announced the completion of the environmental review of the New York Bight lease areas, stretching off the coast of New Jersey and New York, on Dec. 16. The six separate lease areas will total 480,000 acres that could support 5.6 GW to 7 GW of offshore wind.

The lease sale includes incentives for domestic supply chain investment and requirements for early engagement with stakeholders groups and communities, which were both lauded by the New York Offshore Wind Alliance. 

"These leases will lead to investments in port facilities, manufacturing, and workers right here in New York," Fred Zalcman, director of the alliance, said in a statement. "The sale optimizes the productive use of the Northeast's world-class wind resource, while still respecting the marine environment and migratory species, as well as the needs and interests of other ocean energy users, such as commercial fishers, and navigators."

The new lease announcements, presented virtually by Haaland along with New York Gov. Kathy Hochul and New Jersey Gov. Phil Murphy, come a week after Hochul said New York would hold a third offshore wind solicitation for at least 2 GW.

The Interior Department's planned lease auctions will create opportunities for more offshore wind entrants on the East Coast, analysts said.

"Greater competition means better prices for ratepayers and reflects the attractiveness of the U.S. offshore wind market," Zalcman said.

The lease sales this year are anticipated to draw greater interest from a wide variety of stakeholders, including offshore wind developers in Europe and the U.S. oil and gas sector, which has infrastructure for offshore developments in the Gulf of Mexico, experts said.

"The Gulf of Mexico is well-positioned to support a transition to a renewable energy future, as much of the infrastructure already exists to support offshore wind development in the region," BOEM Director Amanda Lefton said in a statement on Tuesday.

BOEM signed a memorandum of understanding in the last month with the Commerce Department's National Oceanic and Atmospheric Administration to collaborate on offshore wind development while promoting cooperative ocean use and protecting biodiversity. In addition, the Department of Transportation recently awarded nearly $50 million for two ports in Virginia and New York to support the offshore wind supply chain.