West Coast’s first offshore wind sale tops $750M

The first auction for wind development off the country’s Pacific coast concluded on Wednesday — raking in a total of $757.1 million after two days of fierce bidding.

The auction, which was the third major offshore lease sale this year, will enable five companies to develop about 4.6 gigawatts of offshore wind capacity, or enough to power more than 1.5 million homes, according to the Department of the Interior.

It also constitutes a significant leap forward in efforts by President Biden to promote wind energy. Biden had set a goal of deploying 30 gigawatts of offshore wind capacity by 2030. 

“The Biden-Harris administration believes that to address the climate crisis head on, we must unleash a new era of clean, reliable energy that serves every household in America,” Interior Secretary Deb Haaland said in a statement.

The auction was also the first U.S. sale to support the development of commercial-scale floating offshore wind, which is a relatively new technology.

Because West Coast waters deepen much quicker than those off the East Coast, using floating infrastructure is more practical than attaching foundations to the seafloor, according to the National Renewable Energy Laboratory.

The Biden administration has set a goal of deploying 15 gigawatts of floating offshore wind by 2035.

“Today’s lease sale is further proof that industry momentum — including for floating offshore wind development — is undeniable,” Haaland said.

“A sustainable, clean energy future is within our grasp,” Haaland added.

The auction, conducted by the Bureau of Ocean Energy Management, offered five lease areas covering 373,268 total acres off Northern and Central California.

The highest bid, $173,800,000, came from California North Floating, LLC, for the 69,031-acre zone OCS-P 0562, in Northern California off the coast of Eureka, per the auction results. 

Among the other winners was RWE Offshore Wind Holdings, LLC , with a bid of $157,700,000 for the 63,338-acre OCS-P 0561, located in the same Northern California lease zone. 

The third highest sale was to Central California Offshore Wind, LLC, at $150,300,000, for the 80,418-acre OCS-P 0564, located within the Central California lease area off the coast of Morro Bay.

Invenergy California Offshore LLC  offered $145,300,000 for the 80,418-acre OCS-P 0565, situated in that same zone.

Lastly, Equinor Wind US, LLC, bid $130,000,000  for an 80,062-acre OCS-P 0563, also in that zone.

The lease sale included a 20 percent credit for bidders who promised to participate in initiatives that support workforce training programs or the development of a domestic wind supply chain, a statement from the Interior Department said.

That credit will result in more than $117 million in investments for these programs, the statement added.

The auction also included 5 percent credits for bidders who committed to entering what is known as “community benefit agreements,” the Interior Department said.

Under such agreements, the companies work with communities, stakeholder groups or tribal entities who are expected to face impacts from the development of the lease areas or from the use of resources harvested from these areas, the statement said.

The credit system “will result in tangible investments for the floating offshore wind workforce,” while benefiting “tribes, communities, and ocean users potentially affected by future offshore wind activities,” said Amanda Lefton, director of the Bureau of Ocean Energy Management.

“This auction commits substantial investment to support economic growth from floating offshore wind energy development — including the jobs that come with it,” Lefton added.

Liz Burdock, founder and CEO of the Business Network for Offshore Wind group, described the auction’s outcome as “an important moment for floating offshore wind in U.S. waters.”

“Industry and our public stakeholders must quickly build a strong domestic supply chain,” Burdock said in a statement.

Doing so, she added, will help “support the new industry and advance the port and transmission infrastructure necessary to ensure market readiness.”