U.S. offshore wind auction attracts record-setting bids

FILE PHOTO: Energy-generating windmill generators on the Eneco Luchterduinen offshore wind farm close to Amsterdam, Netherlands September 26, 2017. REUTERS/Yves Herman

Feb 23 (Reuters) – The most important ever U.S. sale of offshore wind improvement rights – for areas off the coasts of New York and New Jersey – attracted record-setting bids on Wednesday from firms in search of to be part of President Joe Biden’s plan to create a booming new home business.

It’s the first offshore wind lease sale underneath Biden, who has made enlargement of offshore wind a cornerstone of his technique to handle world warming and decarbonize the U.S. electrical energy grid by 2035, all whereas creating hundreds of jobs.

With bidding nonetheless underway, the public sale was on observe to simply high the $405 million U.S. offshore wind public sale report set in 2018, in keeping with updates posted on the U.S. Bureau of Ocean Power Administration’s (BOEM) web page.

After 11 rounds, bidding stood at a record-setting $250 million for a single lease 32 miles (51.5 km) off the coast of New Jersey. The federal government had recognized that 114-acre space – the biggest supplied within the sale – as being able to producing energy for greater than 485,000 houses.

The earlier report quantity paid for a U.S. offshore wind lease was $135.1 million in 2018 for a lease off the coast of Massachusetts.

Excessive bids on every of the opposite 5 areas within the public sale ranged between $12.6 million and $134.3 million as of Wednesday afternoon.

The public sale’s scale marks a serious step ahead for offshore wind energy in the US, which has lagged European nations in growing the expertise. At present, the US has simply two small offshore wind services, off the coasts of Rhode Island and Virginia, together with two further commercial-scale initiatives lately accepted for improvement.

BOEM, which has not held an public sale for wind leases since 2018, is providing 488,201 acres (197,568 hectares) in shallow waters between New York’s Lengthy Island and New Jersey, an space often known as the New York Bight.

The world is 22% smaller than what was initially proposed final summer time because of considerations in regards to the developments’ influence to industrial fishing and army pursuits.

‘ENOUGH WIND TO POWER MILLIONS OF HOMES’

The sale’s 25 accepted bidders embody entities managed by Equinor ASA (EQNR.OL), Avangrid Inc (AGR.N), BP Plc and Eletricite de France SA (EDF.PA), in keeping with authorities paperwork. Every bidder might solely win one lease.

The vitality generated from the newly supplied areas might in the future energy almost 2 million houses, the administration has stated.

Final 12 months, the Biden administration set a purpose of putting in 30 gigawatts (GW) of offshore wind by 2030 alongside the nation’s coastlines. A lot of the present improvement is occurring in waters off of Northeastern states.

New York and New Jersey have set targets of constructing greater than 16 GW of offshore wind by 2035, and Wednesday’s lease areas – which lie between 20 and 69 nautical miles off the coast, in keeping with BOEM – might ship greater than a 3rd of that capability.

“That is sufficient wind to energy hundreds of thousands of houses,” Ed Potosnak, govt director of the New Jersey League of Conservation Voters, stated in an interview. “That is an enormous deal in a state with about 9 million folks.”

Not everybody helps offshore wind improvement. The Biden administration’s ambitions have stoked considerations amongst industrial fishermen and coastal communities about hurt to their livelihoods and property values.

In January, a bunch of New Jersey residents sued BOEM over its leasing plans for the New York Bight. The group, from the summer time colony of Lengthy Seashore Island, is worried in regards to the aesthetic impacts of the generators and potential misplaced tourism.

Greg Cudnik, proprietor of a fishing constitution boat enterprise on Lengthy Seashore Island, worries about what hundreds of wind generators will do to the ocean habitat.

“For all this that is happening and all this that’s put in jeopardy, to me, I do not see the web profit,” Cudnik stated.

Reporting by Nichola Groom in Los Angeles and Christine Kiernan in Ship Backside, New Jersey; Enhancing by Invoice Berkrot

Our Requirements: The Thomson Reuters Belief Rules.