Equinor and Dominion the winners in $92.65 million Central Atlantic offshore wind lease sale

Image: BOEM

Two established U.S. offshore wind players, Equinor and Dominion Energy, were the winners in today’s Central Atlantic offshore wind lease sale.

The sale, details of which were announced in June, was the fifth held during the Biden administration. It attracted $92.65 million in winning bids for two lease areas offshore the states of Delaware, Maryland and Virginia. The sale – the first in the region in a decade – resulted in two provisional winners and $92.65 million in winning bids.

Equinor Wind US LLC provisionally won Lease OCS-A 0557 at $75,001,001, which consists of 101,443 acres and is approximately 26 nautical miles (nm) from Delaware Bay.

Dominion Energy subsidiary Virginia Electric and Power Co provisionally won Lease OCS-A 0558 at $17,650,500, which consists of 176,505 acres and is approximately 35 nm from the entrance of Chesapeake Bay. Six companies participated in the auction.

“Today’s lease sale represents a major milestone in meeting the demand for clean renewable energy along the East Coast,” said Bureau of Ocean Energy Management (BOEM) Director Elizabeth Klein. “BOEM remains committed to responsible offshore wind energy development in the Central Atlantic region in a manner that avoids, reduces or mitigates potential impacts to other ocean users and the marine environment while growing local economies.”

Equinor said that its lease area, located 26 nautical miles from the mouth of the Delaware Bay, has a 2 gigawatt (GW) potential, with the the capacity to produce enough energy to power approximately 900,000 U.S. homes.

“Equinor’s interest in this auction is consistent with our approach to pursue attractive offshore wind opportunities in the United States,” said Molly Morris, president of Equinor Renewables Americas. “The Central Atlantic region has a rapidly growing demand for electricity with widespread support for adding renewable sources of energy into the power mix.”

“Today’s announcement underscores Equinor’s commitment to delivering value through renewable projects,” said Pål Eitrheim, executive vice president of Equinor Renewables. “This is a long-term option with first power post-2035. Developing this lease area will draw upon Equinor’s proven capabilities in offshore wind. We will take a disciplined approach to minimize risk and mature a robust project in our portfolio.”

Dominion Energy said that winning the lease gives it the option to pursue additional offshore wind development in the mid-Atlantic. It quoted BOEM as indicating that the lease area could support between 2.1 gigawatts and 4.0 gigawatts of offshore wind energy generation. The lease area is located approximately 35 nautical miles from the mouth of the Chesapeake Bay.

In early July, Dominion announced the acquisition from Avangrid of the 40,000-acre Kitty Hawk Wind North offshore wind lease area, to be renamed CVOW South. If approved by regulators and constructed, CVOW South would have a capacity of 800 MW, enough capacity to serve 200,000 homes.

At this time, the company does not have an estimated timeline or cost for development of either CVOW South or the new leasehold.

“Offshore wind is critical to our all-of-the-above approach to meet the unprecedented growth of our customer electric demand over the next decade,” said Robert M. Blue, chair, president and chief executive officer of Dominion Energy. “Winning this lease area gives us another low-cost option to meet that growing demand while providing our customers with reliable, affordable and increasing clean energy.”

Dominion says that its CVOW continues to be on-time and on-budget with in-service expected by the end of 2026. To date, 54 monopiles have been installed since the installation campaign began on May 22, 2024, consistent with the company’s target of 70-100 monopiles during the first of two installation seasons that run from May through the end of October

NOIA STATEMENT

National Ocean Industries Association president Erik Milito issued the following statement after the conclusion of the Central Atlantic wind lease sale:

“Offshore wind continues to show a highly favorable long-term trend. The industry is growing, with companies investing in communities, jobs, and the supply chain. The lease area in Maryland and Delaware saw a substantial increase in bid amounts, multiplying several times over compared to a decade ago. Similarly, the lease area offshore Virginia has fetched significantly higher prices than similar leases did just a few years ago.

“The Central Atlantic wind lease sale can sustain the momentum of American offshore wind, which has matured significantly, creating jobs and driving investments across many states, extending well beyond those adjacent to new wind farms. Continued wind lease sales will further build out the supply chain, making the industry more competitive and routine. Over the past 12 months, the first utility-scale U.S. offshore wind farm began producing energy, the first American-built offshore wind substation was launched, and the first American-built, owned, and crewed offshore wind service operations vessel was christened. Additionally, three supporting crew transfer vessels were delivered.

“However, Washington needs to do more to maintain this momentum. This will be the first year without a federal offshore oil and gas lease sale since 1958. After this December, the Interior cannot hold any more offshore wind lease sales until another offshore oil and gas sale is held. The current leasing reality is begging for a Congressional fix to provide much-needed regulatory certainty and normalcy for both offshore oil and gas and wind lease sales.

“Securing new leases is vital for exploring and developing resources crucial to our nation. Periods of inactivity in lease sales only serve to heighten uncertainty and risk pushing investment dollars overseas. Sustaining regular lease sales ensures energy continuity, fosters economic growth and the development of new supply chains, and keeps the United States competitive in the global energy market.”

Sale details HERE