Wind power companies bid more than $4bn for ocean waters near New York
The US’s biggest offshore wind lease sale has attracted record bids of more than $4bn, outstripping any oil and gas auction in American waters, as renewable energy developers compete to secure a prime location to install turbines.
The federal government auction of 488,000 acres in the Atlantic Ocean near New York and New Jersey had drawn in high bids totalling $4.1bn as of early Friday, according to the Bureau of Ocean Energy Management. The sum dwarfs previous wind lease sales.
“It’s safe to say — based on what we know today — the end results of this lease sale will blow our expectations out of the water,” said Heather Zichal, chief executive of the American Clean Power Association, an industry group. “This is a major step forward for the US in terms of standing up a new industry.”
The demand for leases in the area, known as the New York Bight, comes as US President Joe Biden looks to kick-start the country’s nascent offshore wind sector as part of a broader push to decarbonise its power industry by 2035. The administration has set a goal of 30 gigawatts of wind power in US waters by 2030 — enough to power about 10mn homes a year.
Coastal states such as New Jersey and New York have also set their own targets for offshore wind power.
This week’s sale was the first offshore wind auction since 2018, when the sale of 390,000 acres off the coast of Massachusetts brought in $405mn. Bids for one of the six New York Bight areas had risen to more than $1bn by Friday — more than seven times the previous record for a single lease area.
The record paid for oil and gas drilling rights in US waters was $3.7bn in the Gulf of Mexico in 2008, according to Department of the Interior data.
The most recent oil and gas lease sale of an area covering about 1.7mn acres in the Gulf last year — the only such auction held since Biden took office — drew high bids of $192mn. It was later thrown out by a federal court.
The bureau did not identify the individual bidders, but a total of 25 companies were eligible to make offers for the six lease areas, including the clean energy divisions of oil companies BP and Equinor as well as Avangrid Renewables — a US subsidiary of Spain’s Iberdrola — and France’s EDF.
While US onshore wind farms account for 124GW of capacity, only two small offshore operations have been built in the country to date, leaving it far behind Europe.
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The permitting process has been expedited under the current White House. Two large wind farms have been fully permitted and begun construction since Biden took office.
The current auction is the first of as many as seven offshore lease sales the administration hopes to hold by the end of 2025. Others are planned off the coasts of the Carolinas and California later this year, the interior department said.
“America’s clean energy transition is not a dream for a distant future — it is happening right here and now,” said Deb Haaland, US interior secretary, as construction began on the South Fork wind farm off Rhode Island — the country’s second large-scale project — earlier this month.
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