Largest US offshore wind lease auction attracts $4B

UPDATE: Feb. 28, 2022: The New York Bight leasing auction concluded after three days for a total of $4.37 billion in winning bids, the Interior Department announced.

A joint venture of National Grid and RWE Renewables, Bight Wind Holdings, secured the largest of the six sites for $1.1 billion. The site can accommodate at least 1,387 MW of offshore wind, and has the potential of up to 3 GW, according to RWE.

Securing other leases were Atlantic Shores Offshore Wind Bight, owned by EDF Renewables and Shell; Invenergy Wind Offshore; OW Ocean Winds East, a joint venture between Engie and EDP Renewables; Attentive Energy, a joint venture between EnBW and TotalEnergies; and Copenhagen Infrastructure Partners' Mid-Atlantic Offshore Wind. The prices for those areas ranged from $285 million to $795 million.

Dive Brief:

The Bureau of Ocean Energy Management's (BOEM) largest leasing auction for rights to offshore wind development attracted nearly $1.54 billion in bids on Wednesday for six areas with an estimated potential for 5,600 to 7,000 MW of development, depending on the efficiency of the turbines.
BOEM said 14 bidders participated in the first day of the auction, from a total of 25 eligible bidders. BOEM did not identify the bidders, but eligible bidders include Avangrid Renewables, PSEG Renewable Generation, Equinor Wind US, and subsidiaries of EDF Renewables, BP and Shell. Provisional winners will be announced following the end of the auction.
The auction, focused on federal waters in the New York Bight, continues on Thursday morning for the sixth lease area. It is the first of seven BOEM auctions planned by President Joe Biden.

Dive Insight:

Offshore wind advocates say the large number of bidders indicates the deployment targets from the Biden administration and from East Coast states are successfully spurring interest in the area. BOEM's last auction yielded $405 million for 390,000 acres off the coast of Massachusetts.

Last year, the Biden administration set a 30 GW offshore wind goal by 2030 and plans to hold seven lease sales by 2025 to build up that capacity. New York and New Jersey have the largest offshore wind state goals to date, 9 GW and 7.5 GW, respectively, by 2035.

The results from the first day "shouldn’t be surprising because offshore wind is a gold mine of untapped clean energy and represents the best way to meet the Biden and [Gov. Phil] Murphy administrations' climate commitments to combat the impacts of climate change," Doug O'Malley, director of Environment New Jersey, said in a statement. "Now that we’re seeing the demand, next up we must ensure that we responsibly develop offshore wind quickly."

"The investments we are seeing today will play an important role in delivering on the Biden-Harris administration’s commitment to tackle the climate crisis and create thousands of good-paying, union jobs across the nation," Interior Secretary Deb Haaland said in a statement on Friday.

The lease sale will offer a total of 488,201 acres across six areas in federal waters in the first offshore wind auction organized by the Biden administration.

Retrieved from Bureau of Ocean Energy Management.

Live bids after 21 rounds of bidding on BOEM's website also outstripped the last auction for leasing rights for oil and gas development in the Gulf of Mexico. That auction took place late last year and attracted nearly $192 million in high bids.

Following the auction, developers will be granted a lease and work with BOEM to submit a renewable energy site assessment plan (SAP). BOEM anticipates it will take a year between the granting of a lease and the submission of an SAP, which, once approved, will kick off assessments and surveys that will inform the project's construction and operations plan (COP). Site surveys can take up to five years, and BOEM environmental and technical reviews can take up to two years to approve the COP. After BOEM approval, project design and installation plans are submitted and installation begins.