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Massachusetts Offshore Wind - the winner is ..

By: Chris Anderson 29/01/2015 Chris Anderson

General Windfarms

Results of Massachusetts Offshore Wind Auction

The Interior Department’s Bureau of Ocean Energy Management (BOEM) held a lease sale (i.e., auction) during the morning of Jan. 29, 2015, for the Wind Energy Area (WEA) identified offshore Massachusetts. The WEA includes over 742,000 acres and begins about 12 nautical miles offshore Massachusetts south of Martha's Vineyard and 13 nautical miles southwest of Nantucket. From its northern boundary, the area extends 33 nautical miles southward and has an east/west extent of approximately 47 nautical miles. BOEM was hoping to auction four areas as four leases.

The Bureau of Ocean Energy Management (BOEM) Director Abby Ross Hopper hosted a conference today (16:30 GMT; 17:30 CET) identifying the winners of auction and outlining the next steps for commercial wind development offshore Massachusetts.

BOEM Director Abigail Ross Hopper

Only two companies out of the 12 interested parties decided to bid, both bids being for the areas nearest to shore in water depths ranging from 36 metres to 63 metres. There was little competition and what competition there was was over just one of the leases. There were only two bidders, therefore therefore RES and Offshore MW were head to head. Given that the Commercial Lease OCS-A 0501 received a lower value per acre than Commercial Lease OCS-A 0500 it appears both developers wanted Commercial Lease OCS-A 0500.

Director Hopper stated "We are pleased to announce we are moving closer to achieving Presidents Obama's climate action plan to move our economy towards clean energy sources and slow the effect of climate change. BOEM has concluded our fourth auction for commercial wind energy leases in Federal Waters. We have nearly doubled the acreage leased for Wind Energy for competitive sales. A major goal of our offshore renewable energy programme is to fully harness the energy and economic benefits of our Nation's wind potential by implementing a leasing process that is efficient and thorough and we are meeting that goal.

I am please to announce that RES America Development and Offshore MW LLC has been identified as the provisional winners of this Auction. Both companies are well established and have experience developing wind facilities. Once the leases are issued these companies will be able to plan for and propose wind facilities in an environmentally responsible manner according to the lease terms and associated development plan"

Dr Walter Cruickshank added"At the start of todays auction BOEM offered four lease areas for interested companies to bid upon. During the auction BOEM set an initial asking price for each of the areas being offered and raised the price in the subsequent round for any area where more than a single active bidder remained. Specifically RES America submitted the winning bid of $281,285 for lease number 500 which consists of 187500 acres (Commercial Lease OCS-A 0500). Offshore MW (LLC) submitted the winning bid $166,886 for lease 501 (Commercial Lease OCS-A 0501) consists of 166,886 acres. The were no bids submitted on the other two lease areas. We applaud these two companies for their historic participation in this event.

Next steps

The Attorney General has 30 days to complete an anti-trust review.
If OK the companies will receive their lease agreement after which they have 10 days to sign and return.
After which they have 45 days to pay their first years rent.
Each developer will then have 12 months to submit a site assessment plan for approval.
After the site assessment plan is approved both developers will have 4.5 years to submit a construction and operations plan for approval.
If approved, each developer will have an operations term of 25 years.

The areas not bid upon, Proposed Commercial Lease OCS-A 0502 (248,015 acres) and Proposed Commercial Lease OCS-A 0503 (140,554 acres) will remain part of the Massachusetts wind energy areas however it is uncertain as to if these will be re-auctioned.

Whilst BOEM has put a brave face upon the outcome and claim to be happy with the results and prices paid, it is clear that, with Commercial Lease OCS-A 0501 being sold for $1 per acre, the bids made today are significantly lower than previous auctions totalling $448,171, whereas the previous three rounds achieved a $14 million. BOEM expects to hold another competitive lease sale offshore New Jersey later this year.

Kit Sealye - New York Times expressed concern that Cape Winds recent troubles scared people off in terms of finding buyers for the electricity and asked for comment to which Director Abby Hopper replied "I think the recent activity in Cape wind shouldn't be read as any indicator as to what happened in todays auction. The areas identified here are deeper (greater water depths) and present other challenges. I am very encouraged that two experienced wind developers have chosen to bid and won provisional leases".

Eric Stevens of Offshore MW was pleased with the result stating "Many years of work culminated in this successful auction, a lot went into it prior to today that people are not aware of. Thank you".

According to an analysis prepared by the U.S. Department of Energy’s National Renewable Energy Laboratory, if fully developed, the area leased could support approximately two gigawatts of commercial wind generation, enough electricity to power over 700,000 homes.

Background

The Outer Continental Shelf Lands Act requires BOEM to award leases for renewable energy projects competitively, unless BOEM determines there is no competitive interest. On Dec. 29, 2010, BOEM (formerly Bureau of Ocean Energy Management, Regulation and Enforcement) published a Request for Interest (RFI) in the Federal Register to gauge commercial interest in wind energy development offshore Massachusetts. BOEM also invited the public to comment and provide information-including information on environmental issues and data-for consideration of the RFI area for commercial wind energy leases.

The Massachusetts RFI area was delineated based on deliberation and consultation with the Massachusetts Renewable Energy Task Force. The subsequent selection of a Wind Energy Area (WEA) was based on input received on this RFI area.

BOEM received in the end 12 indications of interest from ten companies wishing to obtain a commercial lease for a wind energy project. Other companies included Energy Management, Inc.; Iberdrola, and Deepwater Wind.

BOEM also received about 260 public comments in response to the RFI and after consideration of the public comments, as well as input from BOEM's intergovernmental Massachusetts Renewable Energy Task Force, BOEM modified the planning area offshore Massachusetts and proceeded to publish a Call for Information and Nominations to identify locations within the offshore Call Area in which there was industry interest to seek commercial leases for developing wind projects. The Call Area is located off the coast of Massachusetts It contains 826,241 acres and contains 132 whole OCS lease blocks as well as 19 partial blocks.

On June 17, 2014, Secretary of the Interior Sally Jewell and BOEM Acting Director Walter Cruickshank joined Massachusetts Governor Deval Patrick to announce that more than 742,000 acres offshore Massachusetts will be available for commercial wind energy leasing. The proposed area is the largest in federal waters and will nearly double the federal offshore acreage available for commercial-scale wind energy projects.

RES America
RES Americas is a renewable energy company in North America. They belong to parent company RES Ltd. headquartered in the U.K. and was founded in 1982. The RES Group of companies has constructed nearly 100 wind projects with a total capacity of more than 8,000 megawatts (MW) around the world. RES Americas has been active in North America since 1997, and has a renewable energy and storage construction portfolio that exceeds 7,000 MW and over 70 projects, as well as 534 miles of overhead and transmission lines. In addition, RES Americas has a development pipeline of wind and solar projects across North America, and the company currently operates more than 200 MW of renewable energy and storage projects. THey developed and constructed their first project, the 60 MW Cameron Ridge wind farm in Tehachapi, California in 1999. In 2001, they went on to co-develop and construct the 278 MW King Mountain Wind Ranch in Texas, the largest wind project in the world at the time.

Offshore MW LLC
The sister company of WindMW, which is building a 288MW offshore wind project in the German North Sea; we will bring the experience and know-how from this German project to the United States. OffshoreMW works with the public sector, non-profit organizations, manufacturers, and others. WindMW GmbH is responsible for the planning, construction and operation of the offshore wind farms Meerwind Süd and Meerwind Ost. The company whose shareholders are Blackstone (80%) and Windland Energieerzeugungs GmbH is located in Bremerhaven. On 14 July 2008 Blackstone and Windland signed a partnership agreement for the further development of the offshore wind farms Meerwind Süd and Meerwind Ost and WindMW GmbH was founded to realise this project.

Map of the Massachusetts PSN Commercial Leases

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Massachusetts Offshore Wind - the winner is ..

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