U.S. Offshore Wind Auction Breaks Record With $405 Million in New Leases
The U.S. government just smashed its own records when an auction on Friday to lease thousands of acres off the Massachusetts coast for offshore wind development brought in a whopping $405.1 million, signaling that this particular renewable energy sector is finally taking off at high speeds, Utility Drive reported.
If fully developed, the leased area could generate 4.1 gigawatts of commercial energy, enough to power 1.5 million homes, the Department of Interior (DOI) said in a press release. The auction was run by the Bureau of Ocean Energy Management (BOEM), part of the DOI. Even former Interior Secretary Ryan Zinke, whose energy policies have generally favored fossil fuels, expressed excitement in one of his last statements before resigning Saturday.
"To anyone who doubted that our ambitious vision for energy dominance would not include renewables, today we put that rumor to rest," Zinke said in the press release. "With bold leadership, faster, streamlined environmental reviews, and a lot of hard work with our states and fishermen, we've given the wind industry the confidence to think and bid big."
In addition to the final price tag, Friday's auction broke several other records that indicate how far the U.S. offshore wind industry has come in a few years, the Union of Concerned Scientists pointed out in a blog post. Each of the three parcels for sale sold for around $135 million, more than three times the previous record-holding $42 million that Equinor paid for 79,350 acres off the coast of Long Island last year. Compared to the Long Island auction, Friday's bidding also nearly doubled the record for the number of companies participating, with 11 vying for the parcels over 32 rounds. Parcels went for more than $1,000 an acre, while Equinor had paid only $535 an acre a year ago.
The winners were Equinor, Vineyard Wind and Mayflower Wind, which is part of a collaboration including oil giant Shell. But the message the auction sent to the industry made even the losers feel like winners. At least that was the case for Bill White, North American offshore wind director for the German company EnBW.
"I remember almost literally begging companies to bid a few years ago," White told the Union of Concerned Scientists. "I don't think anybody would have predicted that this many companies, including oil and gas companies and utilities would be bidding. And none too soon with climate change being far worse than ever."
The parcels leased on Friday to Equinor, in pink, Mayflower, in purple and Vineyard, in green.BOEM
Indeed, an attempt to auction off the same 390,000 acres off of Martha's Vineyard in 2015 got no bids. The U.S. has lagged about 20 years behind Europe in developing offshore wind power, but infrastructure investments in Massachusetts and legislative commitments to get more energy from offshore wind power in several Northeast states are turning the region into a hub of offshore wind development.
"I'm so proud to see this market come of age," White said.