History Making Offshore Wind Auction Beats Any Oil, Gas Lease

Last week’s offshore wind lease auction in the US was a major milestone in the global energy transition, and not just on account of the history-making scale of the proceeds. The auction also demonstrates that a fossil energy economy can make a quick pivot into renewables, if the political pins are all in place. Climate action advocates and policy makers are sure to take note, especially at this time with the lethal consequences of a fossil-fueled dictatorship on full display in Europe.

The Somewhat Weird History Of The US Offshore Wind Industry

The US has a formidable array of offshore wind resources in its pocket, most ideally along the Atlantic coast where wind speeds are optimal and the relatively shallow waters of the Continental Shelf are amenable to the construction method of choice, which consists of turbines sitting on a single tower (aka a monopile) fixed into the seabed.

Wind conditions are less than optimal in the Gulf of Mexico, though the US Department of Energy has been making the case for placing turbines in those waters. The Pacific coast involves deep water challenges, but floating turbine technology is providing a path to development there. The waters of the Great Lakes present another opportunity, though perhaps a distant one.

For reasons best known only to themselves, policy makers in several Atlantic coast states stymied offshore wind development during the Obama administration, burning tinier nations with smaller coastlines to grab the pole position in the global offshore wind industry.

Things got weirder in another direction during the Trump administration. The former President, who was notoriously not fond of offshore wind turbines (at least, not the wind turbines in Scotland), nevertheless stood by while the Interior Department’s Bureau of Ocean Energy Management put the finishing touches on the nation’s first ever streamlined process for leasing and permitting offshore wind farms.

Perhaps he was preoccupied with other matters, such as withholding US aid to Ukraine in exchange for manufacturing dirt on his political rivals. Whatever. BOEM held its first lease auction under the new process in 2018. By the time the former President finally caught on, it was too late.

Offshore Wind Auction Makes History

Last week’s auction was the first since 2018 and the first since President Biden took office, and it did not disappoint.

“The 2018 auction involved 19 qualifying companies competing for a whack at 390,000 acres off the coast of Massachusetts, with a potential for 4.1 gigawatts if fully built out,” CleanTechnica observed. “Today’s auction beats that handily, with 25 companies, up to 7 gigawatts in wind energy potential (5.6 gigawatts is the floor estimate), and six lease areas totaling 488,000 acres.”

When the dust settled, the Interior Department called last week’s auction “the nation’s highest-grossing competitive offshore energy lease sale in history, including oil and gas lease sales,” racking up a total take of approximately $4.37 billion.

Pending final review and confirmation, the six winning bidders are Attentive Energy, Bight Wind Holdings, Atlantic Shores Offshore Wind Bight, Invenergy Wind Offshore, Ocean Winds East, and MidAtlantic Offshore Wind.

The “bight” in two of those names refers to the location of the lease areas, the New York Bight, which is the corner of ocean formed by coasts of New Jersey and Long Island.

A Soup-To-Nuts Approach

The right to plant offshore wind turbines in the New York Bight comes with some strings attached. The lease agreements stipulate that the winning bidders must help generating a “robust” domestic wind industry supply chain along with the clean kilowatts, and engage with transmission planners as well as other offshore stakeholders.

“These additions are intended to promote offshore wind energy development in a way that coexists with other ocean uses and protects the ocean environment, while also securing our nation’s energy future for generations to come,” DOI explains.

“To advance the Interior Department’s environmental justice and economic potential goals, lessees will be required to identify and make efforts to engage with Tribes, underserved communities, and other ocean users who could be affected by offshore wind energy development,” DOI adds. “The Department will hold companies accountable for improving their engagement, communication and transparency with these communities.”

In accordance with President Joe Biden’s pro-union policies, the lease agreements also call for union workers to do the heavy lifting.

That lays the table for another group of 16 new offshore wind projects already in the pipeline for a total of more than 22 gigawatts, on top of two projects that are already into the construction phase, totaling 930 megawatts.

You Ain’t Seen Nothing Yet

New York, New Jersey, and other states on the northern reaches of the Atlantic Coast stand to reap billions in economic benefits from the job-creating onshore activity generated by offshore wind farm construction.

The political winds have been less favorable in other states, but the Interior Department is stirring the pot. At the tail end of the Bight lease auction recap, the agency listed the areas it is pursuing in the near future.

States in the Central Atlantic area made the cut, meaning Delaware, Maryland, Virginia, and part of North Carolina down to Cape Hatteras. Plans for the rest of North Carolina are in the works, and South Carolina is also included.

Georgia, though, does not appear on the list. Plans for designating an offshore wind area for the Peach State stalled out after 2016, and BOEM appears to have put it on the back burner. If you have any thoughts about that, drop us a note in the comment thread.

Florida has also been inactive individually, but BOEM has organized a task force covering the Gulf of Mexico. Florida could get a toehold in the Gulf though that door, but it will have to beat out Louisiana, which has already started pursuing opportunities there. Keep an eye on other wind-related activities in Louisiana, including green ammonia and green hydrogen.

BOEM also has near-term plans for the Gulf of Main, California, and Oregon, where conditions call for new floating turbine technology.

All Eyes On Ukraine

Against this backdrop, Russia’s unprovoked attack on Ukraine has sparked a fresh burst of commentary from decarbonization advocates, who describe a rippling global crisis in energy prices and supply consequent on the invasion, and on economic sanctions against Russia.

The global nature of the crisis is all but certain to intensify in the coming days. Russia falls into the category of “too big to fail” in terms of the global fossil energy economy, which explains why its oil and gas export industry escaped the first round of sanctions. However, on February 25, the EU announced a new round of sanctions aimed at Russia’s energy sector as well as the related fields of finance, transport, and technology. Exclusion from the SWIFT messaging systems, along with additional sanctions imposed by the US and other nations, will also impact the ability of Russia’s energy sector to do business.

On February 27, the US announced $54 million in additional humanitarian aid to Ukraine. CleanTechnica readers can also help support Ukraine during this time by donating to aid organizations. National Public Radio and Fortune magazine are among the many news outlets compiling lists of organizations accepting aid.

Follow me on Twitter @TinaMCasey.

Photo: Offshore wind resources courtesy of US Department of Energy.


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