Offshore Wind Area Auctions Active on US East Coast

As a result of market interest and political demand, the US Department of the Interior, via its Bureau of Ocean Energy Management (BOEM) has undertaken a significant amount of offshore wind area lease activity, the most recent being an auction held on Aug 19th for two wind energy areas off the coast of Maryland.

After 19 rounds of very competitive bidding the auction was won by US Wind, a subsidiary of Renexia, the renewable-energy development and construction company owned by Toto S.p.A. When fully built, this Maryland area could generate enough energy to power about 300,000 homes.

While it is easy to get frustrated by the seeming lack of a cohesive national energy strategy in the US, in truth – the size of the country and the autonomy of individual states allows for a more realistic regional approach to our energy future. You don’t have to look hard to see real positive movement in the US offshore wind market in 2014. With contract awards being issued at Cape Wind in Massachusetts and Block Island Wind Farm in Rhode Island and the Department of Energy down-select issued this past May for projects in Virginia, New Jersey and Oregon real progress is being made.

Against that immediate backdrop – the BOEM auctions illustrate clearly the scale the next rounds of development will bring to the US – and it is significant. Here is a quick snapshot of that competitive lease activity:

Rhode Island: In July 2013, BOEM auctioned the area as two leases, referred to as the North Lease Area (Lease OCS-A0486) and the South Lease Area (Lease OCS-A0487), which were won by Deepwater Wind. The North Lease Area consisted of about 97,500 acres and the South Lease Area consisted of about 67,250 acres. When fully developed it is anticipated that these areas will produce over 1GW of wind energy

Virginia: September 2013, BOEM held an Auction for the Virginia WEA, which was won by Dominion Virginia Power. When fully developed it is anticipated that these areas will produce over 2GW of wind energy.

Massachusetts: In June 2014, BOEM announced that more than 742,000 acres offshore Massachusetts are available for commercial wind energy leasing. The area has been split into four (4) zones with lease awards to be issued by the end of 2014. When fully developed it is anticipated that these areas will produce over 5GW of wind energy.

New Jersey: In July 2014, BOEM announced the auction of two leases offshore New Jersey for commercial wind energy development. Lease awards to be issued by the end of 2014. When fully developed it is anticipated that these areas will produce over 3.5GW of wind energy.

The East Coast (and soon to follow the West Coast) of the US are at long last laying the foundations of an industry which will provide high quality jobs for thousands and produce renewable electricity at utility scale, making offshore renewable energy an important contributor to the US energy future.

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