Offshore wind auction bids in the United States have surpassed $1.5 billion, with more to come

The largest-ever sale of offshore wind development rights in the United States drew a record $1.5 billion in bids on Wednesday, supporting President Joe Biden’s plan to create a new domestic industry. The auction, which will continue on Thursday, is the first under Biden, who has made offshore wind expansion a cornerstone of his plans to combat global warming and decarbonizes the United States’ electricity grid by 2035 while creating tens of thousands of jobs.

According to updates posted on the US Bureau of Ocean Energy Management’s (BOEM) website, the combined live bids for the six leases stood at nearly $1.54 billion after 21 rounds of bidding. That easily surpassed the previous year’s record of $405 million for an offshore wind auction in the United States. It was also far more than recent oil and gas auctions in federal waters off the coast of the United States. A sale of drilling rights in the Gulf of Mexico, for example, drew high bids of $191.7 million late last year.

The auction was attended by 14 companies, according to BOEM. The website did not name the companies bidding for the leases, but approved bidders included Equinor ASA, Avangrid Inc, BP Plc, and Eletricite de France SA, among others, according to government documents published last month. By the end of the day, five of the six leases on offer had each received bids far exceeding the $135.1 million record set for a single US offshore wind lease in 2018.
The most expensive bid was $410 million for a lease 32 miles (52 kilometres) off the coast of New Jersey. The government had determined that the 114-acre (46-hectare) area – the largest offered in the sale – could generate enough power to power more than 485,000 homes. The auction’s high level of interest represents a significant step forward for offshore wind power in the United States, which has lagged behind European nations in developing the technology. The United States currently has two small offshore wind facilities off the coasts of Rhode Island and Virginia, as well as two additional commercial-scale projects that have recently been approved for development. BOEM is offering 488,201 acres in shallow waters between Long Island, New York, and New Jersey, known as the New York Bight.

Because of concerns about the impact of developments on commercial fishing and military interests, the area is 22% smaller than it was originally proposed last summer. According to the administration, the energy generated by the newly offered areas could one day power nearly 2 million homes. Last year, the Biden administration set a goal of installing 30 gigatonnes (GW) of offshore wind along the country’s coastlines by 2030, which would be enough to power 10 million homes. Much of the current development is taking place in waters off the coasts of the Northeastern states.

New York and New Jersey have set goals of constructing more than 16 GW of offshore wind by 2035, and the lease areas announced on Wednesday – which are located between 20 and 69 nautical miles off the coast, according to BOEM – could deliver more than that amount.

In an interview, Ed Potosnak, executive director of the New Jersey League of Conservation Voters, said, “That’s enough wind to power millions of homes.” “In a state of about nine million people, that’s a big deal.”Offshore wind development is not universally supported. The Biden administration’s ambitions have fueled fears among commercial fishermen and coastal communities that their livelihoods and property values will be jeopardised. A group of New Jersey residents sued BOEM in January over its leasing plans for the New York Bight. The group from Long Beach Island’s summer colony is concerned about the turbines’ aesthetic impact and potential loss of tourism.

Greg Cudnik, owner of a Long Beach Island fishing charter boat company, is concerned about what thousands of wind turbines will do to the ocean habitat.”I don’t see the net benefit for all of this that’s going on and all of this that’s being jeopardised,” Cudnik said.