[Editor's note: This article was updated at 3:06 p.m. CT Dec. 14.]
Equinor Wind, Mayflower Wind Energy and Vineyard Wind—all based in Europe—were the provisional winners of what U.S. federal officials are calling the highest-grossing federal offshore wind lease sale to date for the country.
The Dec. 13-14 auction for the three wind leases, leftovers from the 2015 Atlantic wind lease sale, offshore Massachusetts brought in a record $405 million in bids—each for about $135 million.
“We are truly blown away by these results,” Walter Cruickshank, acting director for the U.S. Bureau of Ocean Energy Management, said on a media call Dec. 14.
Federal officials attributed leadership from Massachusetts, which passed legislation that paved the way for offshore wind power purchases, plus activity from the Block Island Wind Farm and results from other auctions for driving interest from companies. In all, just under a dozen companies participated in the auction that lasted 32 rounds.
“Mayflower’s entry into U.S. offshore wind is exciting and will leverage Shell and EDPR’s [EDP Renewables] years of combined wind development and offshore experience,” John Hartnett, director of Mayflower, said in a statement. “We commend BOEM on a successful bid round and look forward to working with local groups and communities to realize this opportunity.”
The lease makes Equinor’s second offshore the U.S.
“This acquisition complements our existing position on the U.S. East Coast and gives us a foothold to engage in the Massachusetts and wider New England market, a region notable for its strong commitment to offshore wind,” Christer af Geijerstam, president of Equinor Wind US, said in a statement.
The auction was held amid heightened interest in renewables by some energy companies looking to expand their portfolios and shrank their carbon footprints, while meeting growing energy demand.
“It’s indicative of the strength of a growing industry of offshore renewable energy,” said Jim Bennett, chief of the Office of Renewable Energy Program.
There are currently 12 active leases on the Atlantic Coast, stretching from Massachusetts to North Carolina. The latest auction offered nearly 390,000 acres offshore Massachusetts, which if fully developed could generate about 4.1 gigawatts (GW). That’s enough to supply nearly 1.5 million homes, federal officials have said.
The results drew applause from the National Ocean Industries Association (NOIA). In a statement, NOIA President Randall Luthi called the $405 million offshore wind lease sale unheard of—until today.
“In fact, today’s phenomenal sale results eclipse the results of all seven previous U.S. offshore lease sales combined and demonstrate that not only has offshore wind arrived in the U.S., but it is clearly set to soar,” Luthi said. “In addition, the level of participation today, especially from seasoned offshore oil and gas developers, exemplifies that the offshore industry is an advocate for the ‘all of the above’ energy portfolio.”
A 122,405-acre wind energy area offshore North Carolina received the high bid of about $9 million from Avangrid Renewables, for example, during a March 2017 auction.
Equinor held the previous record of $42.5 million for a lease off the coast of New York, Reuters reported.
Despite the success of the latest round, Luthi warned of proverbial “clouds on the horizon,” referring opposition from some environmental groups and coastal communities plus the need for regularly scheduled offshore wind sales and other challenges. He pointed out that with the exception of sales proposed offshore New York and California, which BOEM currently has calls out for information, there are no future lease sales scheduled.
“NOIA continues to call on BOEM to develop an offshore wind leasing plan that schedules at least four 500 megawatt lease sales annually, with a target of an additional 20 GW of offshore wind by 2034,” Luthi said. “Today’s spectacular sale results suggest that goal could easily be met and even surpassed; yet America could miss out on this incredible energy opportunity if BOEM fails to open more areas in a timely fashion.”
If the leasees receive all required governmental approval and decide to move forward with plans, they will have 33 years to construct and operate the project.
Equinor, formerly Statoil, is based in Norway. Mayflower Wind Energy is a joint venture of Royal Dutch Shell and EDPR, and Vineyard Wind is a joint venture that comprises Copenhagen Infrastructure Partners and Avangrid Inc.
Velda Addison can be reached at firstname.lastname@example.org.