US offshore wind power lease sale nets record $4.3B

Energy companies bid a record $4.37 billion Friday for leases to develop wind power off the U.S. East Coast, authorities said.

The six sites are in an area called the New York Bight and total 488,000 acres (197,500 hectares), making it the biggest U.S. renewable power auction ever. 

Development of all six tracts could generate as much as seven gigawatts of wind energy, enough to power some two million homes, officials said.

“The investments we are seeing today will play an important role in delivering on the Biden-Harris administration’s commitment to tackle the climate crisis,” Interior Secretary Deb Haaland said in a statement. 

Bidders seeking leases to operate and install turbines in these areas quickly exceeded previous levels and resulted in the “nation’s highest-grossing competitive offshore energy lease sale in history, including oil and gas,” the Interior Department added. 

In the last auction of offshore areas in 2018, the lots had gone for about $1,040 per acre, but this time they went for nearly $9,000 per acre after three days and 64 rounds of bidding. 

Bidding started at $48.8 million, with the largest lot being snapped up by Bight Wind Holdings for $1.1 billion. 

The other five companies included Atlantic Shores Offshore Wind Bight — a joint venture between Shell and EDF. 

The authorities had authorized 25 companies to participate in the auction. 

As part of its fight against climate change, President Joe Biden’s administration has set the goal of producing 30 gigawatts of offshore wind energy by 2030. 

Currently, there are just two producing offshore wind sites in the United States generating a modest 42 megawatts.

The Biden administration last year cleared construction of two larger offshore wind projects: Vineyard Wind in Massachusetts and South Ford Wind offshore Rhode Island.

The administration also envisions reviewing at least 16 plans to construct and operate commercial offshore wind energy facilities through 2025 and plans at least six auctions through that year. 

Projects are expected near the coasts of North Carolina and California. 

The winning companies have committed to several conditions, including employing unionized workers and complying with environmental regulations. 

They will also have to engage in dialogue with Native American tribes with a relationship to these areas, with fishermen and with communities that may be impacted by the installation of wind turbines.  

The auction is just the beginning of a process that could take several years, as companies must now obtain a permit and then build the turbines.