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California rakes in $757 million for first US floating wind leases

By: James Bernthal-Hooker 08/12/2022 U.S. Department of the Interior

General Windfarms

The Bureau of Ocean Energy Management (BOEM) has conducted its first auction for floating wind leases in the US federal waters. The much-anticipated auction in California saw seven companies bidding, with five securing leases for between $130 million and $173.8 million apiece.

The California auction included two areas in Humboldt (northern California) and three in Morro Bay (central California), and BOEM estimates their capacities to total 4.5 GW, although the new leaseholders are anticipating almost double this.

Provisional winners are as follows:

RWE Offshore Wind Holdings, LLC secured Lease Area OCS-P 0561, an area of 63,338 acres, with a bid of $157,700,000. RWE claims this area can host up to 1.6 GW.

California North Floating, LLC (Copenhagen Infrastructure Partners) gained the 69,031-acre Lease Area OCS-P 0562 for $173,800,000. CIP claims this area can host over 1 GW.

Equinor Wind US, LLC won Lease Area OCS-P 0563 (80,062 acres) for $130,000,000. Equinor expects this area to host up to 2 GW.

Central California Offshore Wind, LLC (Ocean Winds and CPP Investments) secured Lease Area OCS-P 0564 (80,418 acres) for $150,300,000. Ocean Winds suggests that up to 2 GW can be hosted here.

Invenergy California Offshore LLC gained the 80,418-acre Lease Area OCS-P 0565 with a bid of $145,300,000. Invenergy claims this area can host at least 1.5 GW.

This result will be analysed in 4C Offshore’s forthcoming Market Overview report, exclusive to our Offshore Wind Farms subscribers.

The auction included a 20% credit for bidders who would commit to a monetary contribution to initiatives or programmes supporting workforce training for the floating wind industry, developing a US domestic supply chain for floating wind, or both. The Department of the Interior reports that this credit will lead to over $117 million in investments for these programmes or initiatives.

Also included was a 5% credit for bidders who committed to entering community benefit agreements (CBAs). These can be Lease Area Use CBAs with communities, stakeholder groups, or tribal entities whose use of the lease areas or resources will be impacted by offshore wind development. They can also be General CBAs with communities, tribes, or stakeholder groups expected to be affected by marine, coastal, or human environment impacts from the development.

43 companies qualified to bid in the auction, so the turnout was lower than some expected. However, it does not necessarily indicate a lack of interest in American floating wind. Developers know there will be plenty more opportunities to purchase deep-water acreage in coming auction rounds in Oregon, the Central Atlantic, and the Gulf of Maine.

Floating offshore wind is no longer just California dreaming; it is becoming Californian reality. This auction was BOEM’s third such this year, following two in shallower waters suiting fixed offshore wind in the New York Bight in February and Carolina Long Bay in June.

rweFor more information on offshore wind farms worldwide, click here.

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California rakes in $757 million for first US floating wind leases

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