Last week saw the announcement of a major development in the United States’ offshore wind industry, as well as the federal government’s land lease programmes. The Bureau of Ocean Energy Management, a subsidiary of the Department of the Interior, revealed plans to hold a 23 February auction of six lease plots within the New York Bight, the most to ever be offered at a single auction.
These will mark the first lease deals for offshore wind in the Biden-Harris administration, which has made climate change and clean energy a key pillar in its Build Back Better policy agenda. Specifically, the executive branch seeks to install 30GW of offshore wind capacity before the end of the decade.
Developers were required to apply for pre-qualification to compete in the auction, and 25 firms have done so, including oil giant BP, the Arclight-owned CPV, Diamond Wind North America, East Wind, EDF Renewables Development, Macquarie’s Green Investment Group and Invenergy Renewables, which recently received a $3 billion injection from Blackstone. According to a source close to BOEM, all 25 companies – which include traditional offshore wind players and newer, smaller players – are expected to compete in the auction.
Infrastructure Investor understands that the New York Bight was chosen from a list of sites identified by the Department of the Interior scattered across the Mid Atlantic, the Gulf of Mexico and the California coastline. The states of New York and New Jersey have been collaborating with the federal government since the project’s conception, as they expect to be the main beneficiaries of any energy created by the facilities to be constructed – presently, the Department of the Interior anticipates upwards of 7GW.
Though the offices of New York and New Jersey governors Hochul and Murphy respectively have been involved, the project will not be in any way related to the $500 million that governor Hochul plans to dedicate to make New York the “nation’s hub” for offshore wind, as she announced earlier this month.
BOEM would set a fee rate of 2 percent for the entire duration of commercial operations under the lease. According to a spokesperson from BOEM, an additional 1 percent operating fee may be incurred by the leasing firm if it is able to manufacture four of the following key parts in the United States: nacelles, turbine blades, towers, foundations, transition pieces, inter-array cables, export cables and offshore substations.