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BOEM bidding war finishes

By: Tom Russell 14/12/2018 4C Offshore

General Windfarms

The Bureau of Ocean Energy Management (BOEM) has named the winners for the U.S.'s highest grossing offshore wind auction to date. Located 16-20 nautical miles off the coast of Massachusetts, the three lease areas total nearly 390,000 acres (1578km²) and could support approximately 4.1GW of commercial wind generation, enough electricity to power nearly 1.5 million homes. Spanning two days, the auction came to a climactic close on Friday 14th December with the top bid reaching $135,100,000.

This is BOEM's eighth and highest grossing competitive lease sale for renewable energy in federal waters with the three bids totaling $405 million. The previous highest grossing offshore wind lease sale was held in December 2016 for a lease area off the coast of New York that received a winning bid of over $42 million.

Three leases were up for grabs (OCS-A 0520, OCS-A 0521, OCS-A 0522) with a total of nineteen companies pre-qualified to participate in the auction.

Equinor Wind US LLC won OCS-A 520 with a bid price of $135,000,000
Mayflower Wind Energy LLC (50% EDPR Offshore North America LLC, 50% Shell New Energies US LLC ) won OCS-A 521 with a bid price of $135,000,000
Vineyard Wind LLC (50% CIP, 50% Avangrid Renewables) won OCS-A 522 with a bid price of $135,100,000

The OCS-A 520 lease area is Equinor's second offshore wind lease in the U.S; the company is developing the Empire Wind project in New York and Boardwalk Wind in New Jersey.

“We are excited to have secured this attractive opportunity, Equinor’s second offshore wind lease in the United States. This acquisition complements our existing position on the US 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,” says Christer af Geijerstam, president of Equinor Wind US.

The 50:50 joint venture between EDPR and Shell marks the companies entrance into the U.S. offshore wind industry. The company stated that "Mayflower will begin working to complete a site assessment plan and initiate formal development efforts on the site, and subject to a positive final investment decision, could bring the wind farm into operation by the mid-2020s." EDPR claim that the lease area could accommodate a total generation capacity of approximately 1.6GW, enough to power more than 680,000 average Massachusetts homes with clean electricity each year.

Vineyard Wind already occupies neighboring BOEM lease sites and is working towards building the '"first large-scale offshore wind energy project in the US", located 15 miles south of Martha's Vineyard.

“Vineyard Wind is excited to expand our offshore wind presence in the waters offshore New England. We are grateful to BOEM for working for many years with stakeholders – including the fishing industry, environmentalists, wildlife experts, and local communities – who helped identify this wind lease area as an appropriate location to generate clean energy. Vineyard Wind is committed to continue working with all of these stakeholders, BOEM, and the states in continuing to build a new industry for the region and making substantial contributions to fighting climate change. This new project lease area will allow us to grow our existing local partnerships, as we continue to apply a community-oriented development approach to our activities.”

Other companies who participated in the auction but were unsuccessful include: Cobra Industrial Services, Inc.; East Wind, LLC; EC&R Development, LLC; EDF Renewables Development, Inc.; Innogy US Renewable Projects, LLC; Northeast Wind Energy, LLC; PNE WIND USA, Inc.; and wpd offshore Alpha, LLC.

Before the lease is executed, the Department of Justice and Federal Trade Commission will conduct an anti-competitiveness review of the auction, and the provisional winner will be required to pay the winning bid and provide financial assurance to BOEM.

During the first preliminary term of one year, the companies will submit a Site Assessment Plan (SAP) to BOEM for approval. The SAP describes the facilities (e.g., meteorological towers or buoys) that will be installed to assess the wind resource and ocean conditions within the lease area. The lessee will then submit a Construction and Operations Plan (COP) to BOEM within 4.5 years and subject to approval the developers can the begin construction.

“This auction will further the Administration’s comprehensive effort to secure the nation’s energy future,”said BOEM Acting Director Cruickshank. “The Commonwealth of Massachusetts and members of the Massachusetts Renewable Energy Task Force have been great partners throughout this process. We look forward to working with them and the lessees as we move forward with next steps for developing offshore wind energy in a responsible manner.”

For more information on offshore wind developments in the US, click here. You can also view projects worldwide on 4C Offshore's interactive map.

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BOEM bidding war finishes

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