02/26/2022
A U.S. auction of locations
for offshore wind farms on the
Atlantic coast resulted in a record $4.37 billion in winning
bids, officials said Friday, a
sign of robust interest in developing renewable energy in
federal waters.
Auction winners for parcels
covering nearly a half million
acres off the coast of New
York and New Jersey included
a partnership of Shell PLC and
EDF Renewables Inc., a partnership of U.S.-based firms Invenergy LLC and energyRe,
and a partnership of Engie SA,
EDP Renewables and fund
manager Global Infrastructure Partners.
The sale is the first for the
from the Wall Street Journal: Wind-Farm Auction Attracts Record Bids
by Jennifer Hiller
"Biden administration and marks
a key moment in the president’s bid to help jump-start an
American offshore wind industry as he seeks to decarbonize
the nation’s electricity grid in
response to climate change.
President Biden has said he
wants the U.S. to generate 30
gigawatts of power through
offshore wind by 2030, enough
to power millions of homes.
While the offshore wind industry is well established in
Europe, the U.S. has just two
offshore wind farms, which operate off Rhode Island and Virginia, and another two projects
approved for development.
The sale, located in an area
known as the New York Bight,
was the first lease auction in
federal waters since 2018 and
the start of an ambitious
schedule to parcel out ocean
blocks for new wind farms that
would ring the coastal U.S.
Coming auctions this year
are planned for waters off
North Carolina, California and
in the Gulf of Mexico. More
leasing will follow in waters
that include the central Atlantic,
Oregon and the Gulf of Maine.
“We expected this lease to be
hotly contested. The U.S. market
is maturing,” said James Cotter,
general manager of Americas
offshore wind for Shell.
The steady diet of federal
auctions is expected to help
bolster the U.S. industry and its
suppliers. If a developer doesn’t
succeed in one auction, another
is around the corner.
“What makes the U.S. opportunity much clearer moving forward and more stable
from an investment standpoint
is the fact that you have now
in placeaschedule for lease
sales coming online,” said Erik
Milito, president of the National Ocean Industries Association, an industry trade group
that includes both offshorewind and oil-and-gas firms.
Bidding this week by 14
companies lasted three days
and went 64 rounds, according
to the Interior Department’s
Bureau of Ocean Energy Management, which handles offshore energy projects. The
auction of just one parcel surpassed $1 billion and by itself
easily eclipsed the previous
record of $405 million in winning bids, set in the 2018 lease
sale of coastal waters off Massachusetts. The government
said it was the highest-grossing competitive offshore energy lease sale in history.
“If there was ever any doubt
about the appetite for offshore
wind in the U.S., the results of
this should put that to rest,”
said analyst Adam Wilson of
S&P Global Market Intelligence.
There are plenty of hurdles
for the new industry. Wind-turbine manufacturers are beset
by pandemic-related challenges
and have proven especially
susceptible to shipping backlogs, component delays and
rising raw-materials prices,
which could pressure project
costs for developers. Offshore
wind in the U.S. already is
more expensive than other
forms of renewable energy.
The projects have encountered opposition from the
commercial fishing industry,
which has raised concerns
about the impact on livelihoods and ecosystems, and
coastal residents who object
to transmission cables and
other infrastructure passing
through their communities.
"