Feds reap $405 million offshore wind bidding bonanza

In what the Trump administration has called a "bidding bonanza", the latest federal auction of rights to lease ocean space for offshore wind development has brought $405 million in winning bids.

On December 14, 2018, the federal Bureau of Ocean Energy Management conducted its eighth competitive lease auction for renewable energy in federal waters. At stake were the rights to lease three areas totaling about 390,000 acres over the Outer Continental Shelf offshore Massachusetts.
The three lease areas in question are located 19.8 nautical miles from Martha’s Vineyard, 16.7 nautical miles from Nantucket, and 44.5 nautical miles from Block Island. These sites were previously offered for leasing through a federal auction in 2015, but went unsold at that time.

Eleven companies participated in the auction by submitting bids, out of a total of nineteen companies that had been deemed qualified to bid. The three provisional winners were Equinor Wind US, LLC  and Mayflower Wind Energy, LLC (each bidding $135 million) and Vineyard Wind, LLC (bidding $135.1 million). These amounts are significantly higher than any previous federal auction for offshore wind sites has yielded; the previous record winning bid was just over $42 million in December 2016 for a lease area offshore New York.

After the Department of Justice and Federal Trade Commission perform an anti-competitiveness review of the auction results, each winning bidder will be required to pay the winning bid amount to the Bureau and to post financial assurance. In exchange, each winning bidder will receive a lease with a preliminary term of one year, during which the lessee may submit a Site Assessment Plan (SAP) to BOEM for approval. Under the regulations governing the federal leasing process, the SAP describes the buoys or other facilities a lessee plans to deploy to assess the lease area's wind resources and ocean conditions. After BOEM approves a lessee's SAP, the lessee may submit a detailed Construction and Operations Plan (COP) to BOEM within four and a half years for approval. When presented with a COP, BOEM will conduct an environmental review. Finally, after BOEM approves any COP, the lessee will have a 33-year term to construct and operate the project.