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.

Federal auction set for Massachusetts offshore wind leases

The federal agency responsible for managing ocean energy development on the Outer Continental Shelf has scheduled an auction for about 390,000 acres offshore Massachusetts, to be held on December 13, 2018.

Under federal law, the U.S. Bureau of Ocean Energy Management is responsible for conducting auctions to lease parcels of federal waters for offshore wind energy development.

On October 17, Secretary of the Interior Ryan Zinke announced that BOEM will hold its next offshore wind auction in December. According to the Final Sale Notice published in the Federal Register on October 19, the agency will hold its Atlantic Wind Lease Sale 4A, covering 388,569 acres offshore Massachusetts. The sale will cover three separate leases, located within an area previously offered but unsold in 2015.

BOEM map of the proposed lease areas available through the December 2018 auction.

Nineteen companies have qualified to participate as bidders in the lease sale:

• Avangrid Renewables, LLC
• Camellia Wind Energy LLC
• CI III Blue Cloud Wind Energy II LLC
• Cobra Industrial Services, Inc.
• Deepwater Wind New England, LLC
• East Wind LLC
• EC&R Development, LLC
• EDF Renewables Development, Inc.
• EDPR Offshore North America LLC
• Enbridge Holdings (Green Energy) L.L.C.
• Innogy US Renewable Projects LLC
• Mayflower Wind Energy LLC 
• Northeast Wind Energy LLC 
• Northland Power America Inc .
• PNE WIND USA, Inc.
• Equinor Wind US LLC
• Vineyard Wind LLC
• Wind Future LLC
• wpd offshore Alpha LLC

According to BOEM, if fully developed, the areas available for leasing could support about 4.1 gigawatts of commercial wind generation.