Record-Breaking #Massachusetts Offshore Wind Auction Reaps $405 Million in Winning Bids RSS Feed

Record-Breaking Massachusetts Offshore Wind Auction Reaps $405 Million in Winning Bids

A record-breaking auction buoyed the U.S. offshore wind industry last Friday when a “bidding bonanza” for three lease areas offshore Massachusetts yielded $405 million in winning bids.

After 32 rounds of bidding spread across two days, provisional winners were announced for lease areas covering 390,000 acres (see map) in federal waters located south of both Martha’s Vineyard and Nantucket.

According to the Bureau of Ocean Energy Management (BOEM), which conducted the auction, the three lease areas can support 4.1 gigawatts of wind generation capacity.

The three winning bids each came in at $135 million. Provision winners are: Equinor Wind US, LLC, the U.S. arm of the Norwegian oil major; Mayflower Wind Energy, LLC, a 50/50 joint venture between Shell and EDP Renewables; and Vineyard Wind, LLC, a 50/50 joint venture between Copenhagen Infrastructure Partners and Avangrid Renewables.

“To anyone who doubted that our ambitious vision for energy dominance would not include renewables, today we put that rumor to rest,” said Interior Secretary Ryan Zinke in a statement. “With bold leadership, faster, streamlined environmental reviews, and a lot of hard work with our states and fishermen, we’ve given the wind industry the confidence to think and bid big.”

“I’m just going to say at this point, wow … we are truly blown away by this result,” said BOEM acting director Walter Cruickshank, on a press call after the auction.

With the conclusion of the Massachusetts auction, BOEM now manages 15 active wind leases. Lease sales have generated a total of $473 million in winning bids for the right to develop offshore wind projects across nearly 2 million acres in federal waters. Before last Friday’s auction, the highest-grossing lease sale had been a December 2016 auction for a tract offshore New York that resulted in a $42.5-mllion winning bid.

Auction demonstrates confidence in a fast-maturing market
For industry watchers, the record-breaking auction demonstrates that the fast-maturing U.S. market is poised for explosive growth.

“These lease prices and the fact that we had 19 companies eligible to bid on these leases is great news for the overall U.S. offshore wind marketplace,” said Liz Burdock, President & CEO, Business Network for Offshore Wind, in a statement.

She noted that just three years ago the same three lease areas did not receive bids in the first Massachusetts offshore wind auction.

“The winners [on Friday] included both current U.S. offshore wind market winners and forward-looking energy companies new to the U.S. offshore wind space. Their significant investments in ocean space off the New England coast is an important indication of the confidence in the 10 GW pipeline of offshore wind farms committed to today,” wrote Stephanie McClellan, director, Special Initiative on Offshore Wind, University of Delaware, in an email.

“More importantly,” she went on, “the results signal confidence in the market for offshore wind beyond current Eastern state requirements. The investments we saw in the auction would likely not be made unless there were trust in continued cost reductions in offshore wind and the ability to deliver projects in the U.S. at a price point low enough to compete with any other form of generation.”

Read full article at GreenTech Media