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Statoil wins New York offshore wind auction

The winning bid was $42.46m for the lease of 79,350 acres off the coast of New York reserved for offshore wind development.

Norwegian oil giant Statoil has won in an auction a lease for about 80,000 acres off the coast of Long Island, New York that is set aside for offshore wind development.

The Bureau of Ocean Energy Management (BOEM), a division of the US Department of the Interior (DOI), announced in a statement on Friday that Statoil Wind US had won a competitive lease auction with a bid of $42.46 million.

Other auction bidders included DONG Energy Wind Power, Innogy US Renewables Projects and the New York State Energy Research and Development Authority.

The New York Wind Energy Area is around 79,350 and starts around 11.5 nautical miles offshore from Jones Beach and extends 24 nautical miles southeast at its farthest point. Statoil said the area is large enough to build turbines that can generate a combined 1GW, but the first phase will likely only install enough to generate 400MW to 600MW.

“The US is a key emerging market for offshore wind,” said Irene Rummelfhoff, Statoil’s executive vice president for New Energy Soultions. “We now look forward to working with New York’s state agencies and contribute to New York meeting its future energy needs by applying our offshore experience and engineering expertise.”

Statoil has sought in recent years to diversify its portfolio from being heavily invested in oil and gas to include a mix of renewable energy sources.

It holds a 40 percent stake in the 317MW Sheringham Shoal project in the UK and a 50 percent stake in the Arkona offshore wind project in Germany, among others. In February, it launched a $200 million venture capital fund to invest in clean energy growth companies.

Winning the New York auction and developing offshore wind in the US is “in line with the company’s strategy to gradually complement our oil and gas portfolio with viable renewable energy and other low carbon solutions”, Rummelhoff said.

Holding the offshore lease does not guarantee a project will be built. Within a year, Statoil must submit a site assessment plan. After that, Statoil will have four and a half years to submit a construction and operations plan and then must conduct an environmental review.

The US has long lagged behind Europe in developing offshore wind. However, several states have taken action this year to tap the nascent market.

Massachusetts will hold its own auction next year to sign long-term power offtake agreements.

In August, Massachusetts Governor Charlie Baker signed legislation requiring utilities to generate 1.6GW of electricity from offshore wind farms within a decade. The same month, energy developer Deepwater Wind christened the US’s first offshore wind project, the 30MW Block Island project, near Rhode Island.

BOEM is conducting surveys and holding lease auctions for various sites along the east coast that could someday be used for turbine development. It has also issued a request for interest in a 68,000 acre lease area off the coast of California.