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U.S. kicks off its biggest offshore wind auction

23 Feb, 2022
Power-generating windmill turbines are seen at the Eneco Luchterduinen offshore wind farm near Amsterdam, Netherlands. Reuters file photo
Power-generating windmill turbines are seen at the Eneco Luchterduinen offshore wind farm near Amsterdam, Netherlands. Reuters file photo

By Nichola Groom

The United States on Wednesday kicked off its biggest ever sale of offshore wind development rights in an area covering nearly half a million acres off the coasts of New York and New Jersey.

It is the first offshore wind lease sale under the administration of President Joe Biden, who has made the expansion of offshore wind a cornerstone of his strategy to address global warming and decarbonize the U.S. electricity grid by 2035.

The auction's first three rounds received more than two dozen bids for five of the six lease areas, according to information posted on the U.S. Bureau of Ocean Energy Management's (BOEM) web site.

A lease 32 miles (51.5 km) off the coast of New Jersey that the government identified as having the most potential for energy development - nearly 1.4 gigawatts (GW) - had reached $28.4 million after the third round.

Bids stood between $4.3 million and $18.9 million for four other leases after the third round.

The auction's scale marks a major step forward for offshore wind power in the United States, which has lagged European nations in developing the technology. Currently, the United States has just two small offshore wind facilities, off the coasts of Rhode Island and Virginia, along with two additional commercial-scale projects recently approved for development.

The Bureau of Ocean Energy Management, which has not held an auction for wind leases since 2018, is offering 488,201 acres (197,568 hectares) in shallow waters between New York's Long Island and New Jersey, an area known as the New York Bight.

The area is 22% smaller than what was initially proposed last summer due to concerns about the developments' impact to commercial fishing and military interests.

The sale's 25 approved bidders include entities controlled by Equinor ASA EQNR.OL, Avangrid Inc AGR.N, BP Plc BP.L and Eletricite de France SA EDF.PA, according to government documents. Each bidder may only win one lease.

The energy generated from the newly offered areas could one day power nearly 2 million homes, the administration has said.

Bidding began on Wednesday morning at 9 am (14:00 GMT).

Last year, the Biden administration set a goal of installing 30 gigawatts (GW) of offshore wind by 2030 along the nation's coastlines. Much of the current development is happening in waters off of Northeastern states.

New York and New Jersey have set targets of building more than 16 GW of offshore wind by 2035, and Wednesday's lease areas - which lie between 20 and 69 nautical miles off the coast, according to BOEM - could deliver more than a third of that capacity.

"That's enough wind to power millions of homes," Ed Potosnak, executive director of the New Jersey League of Conservation Voters, said in an interview. "That's a big deal in a state with about nine million people."

Not everyone supports offshore wind development. The Biden administration's ambitions have stoked concerns among commercial fishermen and coastal communities about harm to their livelihoods and property values.

In January, a group of New Jersey residents sued BOEM over its leasing plans for the New York Bight. The group, from the summer colony of Long Beach Island, is concerned about the aesthetic impacts of the turbines and potential lost tourism.

Greg Cudnik, owner of a fishing charter boat business on Long Beach Island, worries about what thousands of wind turbines will do to the ocean habitat.

"For all this that's taking place and all this that is put in jeopardy, to me, I don't see the net benefit," Cudnik said.