The two lease sites for the development of wind farms off the Humboldt County coast went for $331.5 million in yesterday’s Bureau of Ocean Energy Management auction, the first ever held for areas on the West Coast.
The highest bidders were RWE Offshore Wind Holdings at $157.7 million for 63,338 acres and California North Floating, LLC
at $173.8 million for 69,031
acres, according to a release from the federal Department of the Interior. Three sites off of Morro Bay were also in play, with a total of $757. 1 million in bids coming in for the five leases.
“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. (Tuesday’s) lease sale is further proof that industry momentum – including for floating offshore wind development – is undeniable,” Secretary Deb Haaland said in the release. “A sustainable, clean energy future is within our grasp and the Interior Department is doing everything we can to ensure that American communities nationwide benefit.”
All together, the five sites area estimated to have the potential to produce more than 4.6 gigawatts of wind energy, which the DOI states is “enough to power over 1.5 million homes.”
The release also states that under the leases, the leases are “required to engage with tribes, ocean users, and local communities that may be affected by their lease activities. Lessee engagement must allow for early and active information sharing, focused discussion of potential issues, and collaborative identification of solutions. These communication and engagement activities must be routinely reported to BOEM.”
Read the DOI release below:
WASHINGTON — The Department of the Interior today announced results from the Bureau of Ocean Energy Management’s wind energy auction for five leases offshore California.
The lease sale represents the third major offshore wind lease sale this year and the first ever for the Pacific region. Today’s sale drew competitive high bids from 5 companies totaling $757.1 million, well exceeding the first lease sales that were held in the Atlantic.
“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. Today’s lease sale is further proof that industry momentum – including for floating offshore wind development – is undeniable,” said Secretary Deb Haaland. “A sustainable, clean energy future is within our grasp and the Interior Department is doing everything we can to ensure that American communities nationwide benefit.”
The interest and success of today’s sale represents a significant milestone toward achieving President Biden’s goal of deploying 30 gigawatts of offshore wind energy capacity by 2030 and 15 gigawatts of floating offshore wind capacity by 2035.
“The innovative bidding credits in the California auction will result in tangible investments for the floating offshore wind workforce and supply chain in the United States, and benefits to Tribes, communities, and ocean users potentially affected by future offshore wind activities. This auction commits substantial investment to support economic growth from floating offshore wind energy development – including the jobs that come with it,” said BOEM Director Amanda Lefton. “These credits and additional lease stipulations demonstrate BOEM’s commitment to responsibly grow the offshore wind industry to achieve our offshore wind goals.”
BOEM’s lease sale offered five lease areas covering 373,268 total acres off central and northern California. The leased areas have the potential to produce over 4.6 gigawatts of offshore wind energy, enough to power over 1.5 million homes.
Provisional Winner
Lease Area
Acres
High Bid
RWE Offshore Wind Holdings, LLCOCS-P 0561
63,338
$157,700,000
California North Floating, LLC
OCS-P 0562
69,031
$173,800,000
Equinor Wind US, LLC
OCS-P 0563
80,062
$130,000,000
Central California Offshore Wind, LLC
OCS-P 0564
80,418
$150,300,000
Invenergy California Offshore LLC
OCS-P 0565
80,418
$145,300,000
The lease sale included a 20-percent credit for bidders who committed to a monetary contribution to programs or initiatives that support workforce training programs for the floating offshore wind industry, the development of a U.S. domestic supply chain for the floating offshore wind energy industry, or both. This credit will result in over $117 million in investments for these critical programs or initiatives.
The auction also included 5% credits for bidders who committed to entering community benefit agreements (CBAs). The first type of agreement is a Lease Area Use CBA with communities, stakeholder groups, or Tribal entities whose use of the lease areas or use of the resources harvested from the lease areas is expected to be impacted by offshore wind development.
The second type of agreement is a General CBA with communities, Tribes, or stakeholder groups that are expected to be affected by the potential impacts on the marine, coastal or human environment from lease development.
Under stipulations in the leases, lessees are required to engage with Tribes, ocean users, and local communities that may be affected by their lease activities. Lessee engagement must allow for early and active information sharing, focused discussion of potential issues, and collaborative identification of solutions. These communication and engagement activities must be routinely reported to BOEM.
These lease stipulations are intended to promote offshore wind energy development in a way that coexists with other ocean uses, addresses potential impacts and benefits, and protects the ocean environment, while also facilitating our nation’s energy future for generations to come.
More information about today’s sale, including a map of the lease areas and requirements regarding the bidding credits, can be found on BOEM’s website.
This article appears in Flash Fiction 2022.
