Three developers will spearhead the next wave of the United States' young offshore wind sector after the companies bid a collective $405.1 million to establish wind facilities off the coast of Massachusetts.
Equinor Wind US LLC, Mayflower Wind Energy LLC and Vineyard Wind LLC won the competitive two-day auction Dec. 13-14 after 32 rounds of bidding, the U.S. Bureau of Ocean Energy Management announced. The winning provisional bids of America's eighth competitive offshore wind auction were:
* Equinor bid $135 million for Lease OCS-A 0520, consisting of 128,811 acres.
* Mayflower bid $135 million for Lease OCS-A 0521, consisting of 127,388 acres.
* Vineyard bid $135.1 million for Lease OCS-A 0522. consisting of 132,370 acres.
"Wow, this is the highest-grossing sale ever [in offshore wind auctions]," BOEM Acting Director Walter Cruickshank said during a media call Dec. 14. "We are simply blown away by this result."
Jim Bennett, chief of the BOEM's Office of Renewable Energy Programs, said the results are "indicative of the strength of a growing industry of offshore renewable energy."
If fully developed, the three wind energy areas with nearly 390,000 acres combined could support about 4,100 MW of offshore wind generation, which is enough electricity to power 1.5 million homes.
Equinor Wind is a unit of Norway-headquartered energy developer Equinor. Mayflower Wind is a joint venture between units of Royal Dutch Shell PLC and EDP Renováveis. Vineyard Wind is a venture of Avangrid Renewables LLC and Copenhagen Infrastructure Partners K/S.
Interior Secretary Ryan Zinke announced in April that the BOEM would hold an auction for the wind energy areas that went unsold in a 2015 auction, shortly after federal regulators solicited the public and industry players for feedback on expanding offshore wind leases along the East Coast. Zinke confirmed the Dec. 13 tender during an Oct. 17 speech at an American Wind Energy Association conference.
Massachusetts has been in the center of what has been an eventful year for the young domestic offshore wind industry. Local electric distribution utility units of National Grid USA, Eversource Energy and Unitil Corp. are now waiting for state regulatory approval of their contracts for the output of Vineyard Wind's 800-MW Vineyard Offshore Wind Project after the utilities picked the project to satisfy their solicitation to meet the state's renewable energy goals.
In addition, distribution utilities in Rhode Island and Connecticut are purchasing 400 MW and 200 MW, respectively, from Deepwater Wind's 600-MW Revolution Wind Offshore Project. New York, Virginia and California have also boosted efforts to kick offshore wind industries on both coasts. More than 6,100 MW of offshore wind capacity is projected to be in commercial operation through 2027, according to S&P Global Market Intelligence data, and another 10,300 MW are in the development pipeline without a known estimated commercial operation date.
Moving forward with the leasing process for the Dec. 13-14 auction, Bennett explained that officials from the U.S. Department of Justice and the Federal Trade Commission will have 30 days to conduct an antitrust review. Assuming a successful review, unsigned leases will then be sent to winning provisional bidders, who will have 45 days to pay the first year's rental payments. During that first year, developers may submit to the BOEM a site assessment plan for approval. Following approval, leaseholders must submit a construction and operations plan every six months before the end of the five-year site assessment term, Bennett said.
Finally, the BOEM will conduct additional environmental and technical reviews. If the lessees meet the terms and conditions associated with each lease and plan approvals, the developers will have 33 years to build and operate the projects, Bennett said.