Developer EnBW is hopeful the offshore wind industry in the US will get a significant boost from new auctions for offshore wind leases, following recent actions by the Biden administration
The developer, which opened for business in the US market in 2019, believes the Biden administration’s climate agenda, and language highlighting offshore wind’s importance in future energy scenarios, has come at the right time. States plan an ever-increasing pipeline of projects and political support is high among Congressional leaders keen to create jobs.
On 27 January 2021, President Joe Biden boosted the already booming US offshore wind industry by pledging to double offshore wind generation by 2030. In an executive order on Tackling the Climate Crisis at Home and Abroad, signed on 27 January 2021, the President directed the Secretary of the Interior to "review siting and permitting processes on public lands and in offshore waters to identify steps that can be taken, consistent with applicable law, to increase renewable energy production… with the goal of doublin"g offshore wind by 2030."
Just what was meant by ‘doubling offshore wind by 2030" was not explicitly stated, but has been taken to mean a significant increase in lease auctions for offshore wind, something that EnBW and others have long been calling for.
A dearth of lease auctions has raised concern in the industry in the US, but that looks likely to change following President Biden’s executive order, EnBW external affairs director Damian Bednarz told OWJ.
“The executive order is a clear sign that the new administration is taking offshore wind seriously. The administration will fill in the blanks in due course,” said Mr Bednarz, “but in the meantime, it is clear that the Biden team is making a commitment to offshore wind and has put down a marker.
“I think setting actual targets right now would have been less impactful than getting the language right,” said Mr Bednarz. “The President’s executive order and his remarks are all about messaging.”
Mr Bednarz told OWJ, “Lease auctions for offshore wind are something that the Department of Interior can do relatively quickly to help meet climate goals and drive the development of the supply chain in the US.
“The supply chain always does better when there are multiple customers,” said Mr Bednarz. “More lease areas are critical to ensuring there are more developers involved in the process, and more customers for the supply chain.”
Mr Bednarz said the Department of the Interior is “already primed” for a new lease auction in the New York Bight. Other areas where lease auctions could be brought forward include the Gulf of Maine, he said. Lease auctions off the west coast of the US should not be ruled out either.
“After the New York Bight, the Gulf of Maine and maybe North Carolina could be next in line for lease auctions,” Mr Bednarz told OWJ, “but west coast auctions, in California and potentially offshore Oregon and Washington state could play an important role advancing floating offshore wind technology.
“The Bureau of Ocean Energy Management (BOEM) has been waiting for the right signal from government and now it has got it.
“The process for holding another lease auction is something that can get underway right away and would be an important step. We also know that members of Congress are keen to ensure that BOEM is sufficiently staffed and able to respond to states’ plans for offshore wind.”
At the IPF Virtual Conference in April 2020, EnBW North America president and chief executive Bill White expressed concern that states that want to build many gigawatts of offshore wind capacity might not be able to do so unless BOEM, part of the Department of the Interior, quickly holds more lease auctions.
Mr White said a dearth of lease areas and projects able to bid into solicitations would reduce opportunities for states to hold competitive auctions.
The offshore wind industry in the US has long urged BOEM to line up more lease auctions for offshore wind and hold more auctions steadily after that. None were held in 2019 and, prior to President Biden’s executive order few were on the horizon, having seemingly been slow-walked by Interior under the Trump administration.
EnBW and other developers believe that a long-term pipeline of lease opportunities is essential to provide the basis for new projects to be developed and bid into upcoming solicitations.
At the IPF conference, Mr White said new lease areas are essential to drive competition in the offshore wind sector, ensuring states get projects that meet their needs, avoiding the possibility that a near monopoly might develop with one or two developers winning solicitations because they happen to hold leases, a situation he argued could lead to a dearth of projects ready to bid in response to future solicitations for offshore wind.