Massachusetts offshore wind RFP

Massachusetts' investor-owned electric distribution companies have issued a joint Request for Proposals for offshore wind energy projects.  Through the RFP, the utilities seek proposals for 400 megawatts (or more) of qualifying offshore wind energy generation and associated transmission, with winning bidders earning 15- to 20-year long-term contracts to sell project power.   This Massachusetts offshore wind RFP is designed as the first step in a staggered procurement schedule for compliance with a 2016 state law requiring the utilities to contract for 1,600 MW of aggregate nameplate capacity of offshore renewable generation by June 30, 2027.

In 2016, the Massachusetts legislature enacted the Energy Diversity Act, adding a new Section 83C to the Green Communities Act.  Section 83C provides in relevant part, "In order to facilitate the financing of offshore wind energy generation resources in the commonwealth, not later than June 30, 2017, every distribution company shall jointly and competitively solicit proposals for offshore wind energy generation; and, provided, that reasonable proposals have been received, shall enter into cost-effective long-term contracts."

The pending RFP is the first joint solicitation under Section 83C.   Through the RFP, the distribution companies are seeking to procure a total of approximately 400 MW of Offshore Wind Energy Generation.  The RFP defines this term as:

offshore electric generating resources derived from wind that: (1) are Class I renewable energy generating sources, as defined in Section 11F of Chapter 25A of the General Laws; (2) have a commercial operations date on or after January 1, 2018, that has been verified by the Department of Energy Resources; and (3) operate in a designated wind energy area for which an initial federal lease was issued on a competitive basis after January 1, 2012.

Bids are due by noon EDT on December 20, 2017.  The RFP prescribes a three-stage review process, including an initial eligibility and threshold screening, subsequent qualitative and quantitative review, and finally "further evaluation of remaining proposals to ensure selection of viable projects that provide cost -effective, reliable Offshore Wind Energy Generation with limited risk."

Pursuant to the Department of Public Utilities order approving the solicitation process, projects will be selected for negotiation by April 23, 2018, with contracts submitted for Department approval no later than July 31, 2018.

NY offshore wind zone announced

U.S. ocean energy regulators are advancing plans to lease sites off New York for potential commercial wind energy development.  The federal Bureau of Ocean Energy Management's designation of a Wind Energy Area could ultimately lead to the development of one or more offshore wind energy projects off Long Island.

While the U.S. still is not home to any operating commercial offshore wind projects, BOEM has issued 11 commercial wind energy leases off the Atlantic coast.  Leases awarded include two offshore New Jersey, two offshore Rhode Island-Massachusetts, another three offshore Massachusetts, one offshore Delaware, two offshore Maryland and one offshore Virginia.

In 2011, the New York Power Authority (NYPA) applied to BOEM for a commercial wind lease.  At that time, the public power authority proposed installing up to 194 wind turbines, each generating 3.6 megawatts, for a total project capacity of nearly 700 megawatts.

In January 2013, BOEM issued a Request for Interest to assess whether any other entities were parties interested in developing commercial wind facilities in the same area.  BOEM's review of the nominations of interest it received in response, including indications of interest from Fishermen’s Energy, LLC and Energy Management, Inc., led the agency to determine that there was competitive interest in the area.  As a result, BOEM initiated its competitive leasing process.

In 2014, BOEM published in the Federal Register a Call for Information and Nominations and a Notice of Intent to Prepare an Environmental Assessment, and has held stakeholder meetings.

The process took a step forward on March 16, 2016, when BOEM announced that it had completed the Area Identification process to delineate a Wind Energy Area (WEA) offshore New York. The wedge-shaped area covers approximately 127 square miles (81,130 acres, or 32,832 hectares), beginning about 11 nautical miles south of Long Beach, and extending about 26 nautical miles southeast along its longest portion.

Next steps in the offshore wind leasing process might include BOEM's publication of a Proposed Sale Notice for public comment, along with environmental assessment (EA) and agency consultations, followed by publication of a Final Sale Notice that announces the date, time, and specific conditions of the auction.  According to BOEM, its environmental review is expected to be completed later this year.

North Carolina offshore wind environmental assessment

The U.S. Department of the Interior's Bureau of Ocean Energy Management has released an environmental assessment of the impacts of leasing sites off the North Carolina coast for offshore wind projects.  This milestone supports the Obama administration's plan to offer site leases on the outer continental shelf for renewable energy projects.

Since 2012, BOEM has solicited public comment on the prospect of leasing about 307,590 acres off North Carolina for potential offshore wind development.  BOEM has identified three Wind Energy Areas offshore North Carolina:

• the Kitty Hawk Wind Energy Area (about 122,405 acres), beginning about 24 nautical miles (nm) from shore and extends approximately 25.7 nm in a general southeast direction;
• the Wilmington West Wind Energy Area (about 51,595 acres), beginning about 10 nm from shore and extends approximately 12.3 nm in an east-west direction at its widest point; and
• the Wilmington East Wind Energy Area (about 133,590 acres), beginning about 15 nm from Bald Head Island at its closest point and extends approximately 18 nm in the southeast direction at its widest point.

BOEM's map of North Carolina Wind Energy Areas.

On January 22, 2015, BOEM announced the availability of an environmental assessment for public review and comment.  Under the National Environmental Policy Act or NEPA, an environmental assessment or EA considers the potential impacts of proposed federal action and analyzes reasonable alternatives to the proposed action.  In this case, the action proposed is BOEM's issuance of commercial wind leases and allowing of site characterization and assessment activities on the Atlantic Outer Continental Shelf offshore North Carolina.

BOEM's environmental assessment for North Carolina offshore wind leasing provides the framework for potential federal lease auctions for North Carolina offshore wind sites.  The environmental assessment is available for public comment through February 23, 2015. 

Federal offshore wind auction held for sites off Massachusetts

Federal ocean energy managers have concluded an auction to lease over 350,000 acres off the Massachusetts coast to prepare for offshore wind development.  Of the four parcels up for bid in today's auction, one was provisionally awarded to RES America Developments, Inc. and another to Offshore MW LLC.  Two other parcels failed to attract any bids.

Onshore wind turbines near the Massachusetts coast.

In today's auction conducted by the Interior Department’s Bureau of Ocean Energy Management (BOEM), RES America Developments, Inc. provisionally won the rights to Lease OCS-A 0500 (187,523 acres) after two rounds of bidding, with a winning bid of $281,285.  Offshore MW LLC provisionally won the rights to Lease OCS-A 0501 (166,886 acres) after two rounds of bidding, with a winning bid of $166,886.  These winning bids are significantly below those that were required to win previous federal competitive lease sales for offshore wind sites.

While today's lease awards are a step forward for U.S. offshore wind, neither lease awarded today grants the right to construct or operate an offshore wind project.  Rather, these leases have a preliminary term of one year, to allow the lessee time to prepare a Site Assessment Plan describing the installation of meteorological towers and buoys and other activities the lessee plans to perform to assess local wind resources and ocean conditions.  Site Assessment Plans must be submitted to BOEM for review and approval.

Once BOEM approves a Site Assessment Plan, the lessee will then have up to five years in which to prepare and submit to BOEM a Construction and Operations Plan (COP) providing detailed information for the construction and operation of a wind energy project on the lease.  After BOEM receives a Construction and Operations Plan from a lessee, BOEM will conduct an environmental review of and public comment period for the proposed project.  If BOEM approves a Construction and Operations Plan, the lessee will have an operations term of 25 years.

Lease OCS-A 0502 (248,015 acres) and Lease OCS-A 0503 (140,554 acres) did not receive bids in today's auction.  As shown on a BOEM nautical chart of the Massachusetts Wind Energy Area, these lease areas are generally farther from the Massachusetts coast than the areas awarded through today's auction.

BOEM touts its offshore wind leasing program as part of President Obama’s Climate Action Plan.  The auction held today by BOEM represents the nation’s fourth competitive lease sale for renewable energy sites in federal waters.  Including this auction, competitive lease sales have generated more than $14.5 million in high bids for more than 700,000 acres in federal waters.  Previous auctions covered sites off Rhode Island and Massachusetts, Virginia, and Maryland.  BOEM expects to hold another competitive lease sale offshore the New Jersey coast in 2015.  

Virginia offshore wind site leases to be auctioned

Next month the United States will auction off the rights to develop offshore wind energy projects off the Virginia coast.  The Virginia auction's results will shape the development of offshore wind in North America, as it will represent the nation's second competitive lease auction for commercial offshore wind projects.

As part of the Obama administration's efforts to promote the use of federal lands for the generation of renewable electricity, the federal Bureau of Ocean Energy Management is holding a series of auctions of the rights to lease sites in federal waters over the outer continental shelf.  On July 31, BOEM held an auction for sites off Massachusetts and Rhode Island.  In that auction, Deepwater Wind New England, LLC submitted the winning bid of about $3.8 million for the rights to lease two parcels covering 164,750 acres offshore New England.

BOEM will hold its second competitive lease auction on September 4 for sites off Virginia.  The Virginia auction will be for a single lease for a designated wind energy area covering about 112,799 acres.  The western edge of the lease area is located about 23.5 nautical miles off the Virginia Beach coastline.  If fully developed, BOEM expects the Virginia lease area to support more than 2,000 megawatts of wind generation.

The Virginia Wind Energy Area is outlined in blue in this map provided by BOEM.

BOEM's current offshore wind leasing program - known as "Smart from the Start" - features a process reliant on multiple rounds of proposals and calls for public feedback.  For Virginia waters, that process began in February 2012 when BOEM published a Call for Information and Nominations in the Federal Register.  The Call was designed to evaluate competitive interest for the area, as well as to seek public feedback on existing uses and other considerations relevant to leasing the sea space.  Simultaneously, BOEM published a Notice of Availability for the final Environmental Assessment and Finding of No Significant for commercial wind lease issuance and site assessment activities on the Atlantic outer continental shelf offshore New Jersey, Delaware, Maryland, and Virginia.

BOEM received eight nominations of interest in the lease area in response to the Call.  The eight companies responding with interest were:

• Apex Virginia Offshore Wind, LLC
• Arcadia Offshore Virginia, LLC
• Cirrus Wind Energy, Inc.
• Dominion Virginia Power
• enXco Development Corporation
• Fisherman’s Energy, LLC
• Iberdrola Renewables Inc.
• Orisol Energy US, Inc.

As with the recent auction for sites off Rhode Island and Massachusetts, some of these companies may not choose to participate in the auction.  While BOEM had found nine companies to be legally, technically, and financially qualified to participate in the New England auction, only three actually submitted bids.  For example, Fisherman's Energy and Iberdrola Renewables both qualified for the New England auction, but did not bid.

Assuming interest remains in the Virginia sites, the September auction is expected to yield a single winner.  That winning bidder will pay the amount specified in the final bid for the right to lease part or all of the Virginia wind energy area.  Development of an offshore wind project would then require a series of additional steps, ranging from financing to permitting to interconnection with the mainland grid.  Whether the auction actually leads to offshore wind development off Virginia will thus depend on a number of factors, but the September auction will represent an important step toward the development of the United States' offshore wind resources.