UPDATED: US offshore wind auction blows oil and gas lease sales out of the water

As highlighted previously by OWJ, one particular lease area, the largest on offer, attracted especially high bids. That area, OCS-A 0539 (see map) attracted a winning bid of US$1.1Bn from Bight Wind Holdings LLC, which is led by RWE Renewables. RWE says the area has the potential to host approximately 3 GW of offshore wind generating capacity.

The next highest bid, US$795M, was from Attentive Energy, a joint venture between EnBW and TotalEnergies, for lease area OCS-A 0538.

Next came a bid of US$780M from Atlantic Shores Offshore Wind Bight LLC, an entity owned by Shell New Energies and EDF Renewables, for OCS-A 0541. Shell said that, subject to a future investment decision, the area could support approximately 1.5 GW of wind generation.

OW Ocean Winds East LLC bid US$765M for OCS-A 0547. OW East is a partnership between Ocean Winds, which was created by EDP Renewables and ENGIE, and New York-based Global Infrastructure Partners (GIP), a fund manager. OW Ocean Winds East said the area it has been awarded has the capacity to generate 868 MW.

Invenergy Wind Offshore LLC, a privately-owned renewable energy developer owned by Invenergy, which until now has specialised in developing solar and onshore wind, bid US$645M for OCS-A 0542.

Mid Atlantic Offshore Wind LLC bid US$285M for OSC-A 0544. The company is owned by a Copenhagen Infrastructure Partners fund, CI IV, the latest of CIP’s flagship funds.

Before the leases are finalized, the Department of Justice and Federal Trade Commission will conduct an anti-competitiveness review of the auction, and the provisional winners will be required to pay the winning bids and provide financial assurance to Interior’s Bureau of Ocean Energy Management (BOEM).

The New York Bight offshore wind leases also include stipulations designed to promote the development of a robust domestic US supply chain for offshore wind, and stipulations designed to advance flexibility in transmission planning. These stipulations include incentives to source major components domestically – such as blades, turbines and foundations – and to enter into project labour agreements to ensure projects are union-built.

BOEM director Amanda Lefton said, “We must have a robust and resilient domestic offshore wind supply chain to deliver good-paying, union jobs and the economic benefits to residents in the region. We are requiring lessees to report their engagement activities to BOEM, specifically noting how they’re incorporating any feedback into their future plans.”

Responding to the announcement, National Ocean Industries Association president Erik Milito said, “The record-shattering interest in the New York Bight lease sale is testament to how bright the American offshore wind outlook is and how confident developers are in the strength of the US offshore wind industry as a whole.

“Companies continue to invest and innovate, and the regulatory regime has a firm foundation. The New York Bight is a watershed moment for American offshore wind.”

Mr Milito continued, “In many ways, the New York Bight lease sale is just the kick-off for a busy 2022 for American offshore wind. We applaud the work done thus far by Interior and BOEM. We can clearly see the demand for more leasing, and we encourage the Biden administration to sustain progress through continued lease sales and project approvals.”

American Clean Power chief executive Heather Zichal said, “The scale of this lease sale is historic and shows the strong demand for clean energy. We support BOEM’s path forward to conduct six more lease sales through 2024.”