Massachusets offshore wind sale draws $405 million in winning bids

Massachusets offshore wind sale draws $405 million in winning bids Vineyard Wind

DECEMBER 14, 2018 — Today's BOEM offshore wind lease sale of some 390,000 acres offshore Massachusetts drew competitive winning bids from three companies totaling approximately $405 million. That was way more than the previous highest grossing offshore wind lease sale in December 2016 for the lease area offshore New York that received a winning bid of over $42 million. It was also much more than the $178 million in high bids generated in August's region-wide Gulf of Mexico Lease Sale 251.

The provisional winners of today's lease sale are: Equinor Wind US, LLC with a bid of $135 million for lease area OCS-A 0520; Mayflower Wind Energy, LLC with a bid of $135 million for lease area OCS-A 0521 and Vineyard Wind, LLC with a bid of $135.1 million for lease area OCS-A 0522.

Two of the names are familiar players in the sector. Equinor US is, of course, the Norwegian based company formerly known as Statoil, which was the winning bidder in the December 2016 New York Sale. Vineyard Wind LLC is developing the first large scale U.S. offshore wind project 14 miles south of Martha's Vineyard. It is a 50/50 joint venture between Danish headquartered Copenhagen Infrastructure Partners and Avengrid Renewables, already a major player is U.S. onshore wind and a member of Spain's Iberdrola Group.

So who is Mayflower Wind Energy? It's Shell, in a 50/50 joint venture with a subsidiary of EDP Renewables, whose main shareholder is Energias de Portugal.

Other companies bidding in today's sale were:

  • Cobra Industrial Services, Inc.
  • East Wind, LLC
  • EC&R Development, LLC
  • EDF Renewables Development, Inc.
  • Innogy US Renewable Projects, LLC
  • Northeast Wind Energy, LLC
  • PNE WIND USA, Inc.
  • wpd offshore Alpha, LLC

RI MA Lease Areas FSN Color 9 4 2018The three lease areas auctioned today are located 19.8 nautical miles from Martha's Vineyard, 16.7 nautical miles from Nantucket, and 44.5 nautical miles from Block Island. e manner."

Before the lease is executed, the Department of Justice and Federal Trade Commission will conduct an anti-competitiveness review of the auction, and the provisional winner will be required to pay the winning bid and provide financial assurance to BOEM.

The lease will have a preliminary term of one year, during which the lessee may submit a Site Assessment Plan (SAP) to BOEM for approval. The SAP will describe the facilities (e.g., meteorological towers or buoys) a lessee plans to install or deploy for the assessment of the wind resources and ocean conditions of its commercial lease area.

Following approval of a SAP, the lessee will then have four and a half years to submit a Construction and Operations Plan (COP) to BOEM for approval. This plan will provide a detailed proposal for the construction and operation of a wind energy project within the lease area.

Once BOEM receives a COP, it will conduct an environmental review of the proposed project and reasonable alternatives. Public input will be an important part of BOEM's review process. If BOEM approves the COP, the lessee will then have a term of 33 years to construct and operate the project.

NOIA COMMENTS

National Ocean Industries Association President Randall Luthi issued the following statement on the results of today's wind auction offshore Massachusetts:

"The National Ocean Industries Association (NOIA) applauds Interior Secretary Zinke and the Trump Administration on the historic and impressive results of today's auction of wind lease areas offshore Massachusetts, and we congratulate the successful bidders today – Equinor Wind, Vineyard Wind and Mayflower Wind Energy. All three winning companies are members of NOIA.

"Until today, a $405 million offshore wind lease sale in the U.S. was unheard of. In fact, today's phenomenal sale results eclipse the results of all seven previous U.S. offshore lease sales combined and demonstrate that not only has offshore wind arrived in the U.S., but it is clearly set to soar. In addition, the level of participation today, especially from seasoned offshore oil and gas developers, exemplifies that the offshore industry is an advocate for the 'all of the above' energy portfolio. Traditional sources of energy, such as oil and natural gas, and non-traditional sources, such as wind, will both play a vital role in providing home-grown jobs, revenue and energy security to the U.S. consumers.

"However, there are clouds on the horizon, because maintaining this tremendous level of interest from offshore wind developers requires a reliable inventory of regularly scheduled offshore wind sales and the ability to develop those resources. Coastal communities and extreme environmental groups opposing seismic surveying and the issuance of incidental harassment authorizations under the Marine Mammal Protection Act may literally take the wind out of these sales. Just as it is for offshore oil and gas development, seismic surveying is vital for offshore wind development, specifically in the siting of wind turbines and transmission corridors.

"Unfortunately, a long-term pipeline of wind lease sales does not currently exist. In fact, with the exception of a sales proposed offshore New York or potentially California in 2020, there aren't any future lease sales scheduled, leaving nothing upon which developers can plan future investments.

"To keep investments flowing and truly grow both a U.S. offshore wind industry and the service and supply chain it will depend upon; NOIA continues to call on BOEM to develop an offshore wind leasing plan that schedules at least four 500MW lease sales annually, with a target of an additional 20GW of offshore wind by 2034. Today's spectacular sale results suggest that goal could easily be met and even surpassed; yet America could miss out on this incredible energy opportunity if BOEM fails to open more areas in a timely fashion.

"Finally, as historic as this sale is, it is also a missed opportunity in terms of revenues that could be shared with Massachusetts and other coastal states in New England. Offshore revenue sharing with states and communities is an established policy with other forms of offshore energy development. While Massachusetts and the northeast coastal states will no doubt benefit from the jobs created and economic development related to seismic surveys and construction, operation and maintenance of the wind turbines, none will share a penny of the hundreds of millions of dollars received by the Federal government. Revenue sharing could have put millions in the pockets of coastal states and impacted communities and is a missed opportunity of this energy bonanza."

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