Auction poises U.S. Gulf offshore wind for take off

Business Network for Offshore Wind has released a new report: “Unlocking the Gulf of Mexico’s Offshore Wind Energy Potential.”

Today’s U.S Gulf of Mexico offshore wind lease auction is generating a lot of attention—not least because it brings the offshore wind industry to America’s offshore energy heartland.

The auction will include three lease areas covering a total of over 300,000 acres: one area off the coast of Lake Charles, Louisiana, and two others off the coast of Galveston, Texas. Together, these areas have the capacity to generate up to 3,700 MW of offshore wind power that will further boost the U.S.’s goal of 30 GW by 2030.

A new report from the Business Network for Offshore Wind, “Unlocking the Gulf of Mexico’s Offshore Wind Energy Potential”, says that the U.S. Gulf’s “history of innovation, robust offshore oil and gas experience, and strong supply chain has the potential to catapult offshore wind growth in the region.”

It also addresses the key hurdles, such as how the industry will need to develop technology that can maximize power output from an environment with lower average wind speeds than the East Coast coupled with seasonal hurricane activity, which must be overcome for the region to be successful.

CHALLENGES

“The Gulf of Mexico is uniquely prepared for the offshore wind industry with decades of offshore energy experience already under its belt,” said John Begala, vice president for federal and state policy at the Business Network for Offshore Wind. “Yes, the region has hurdles to overcome, including the creation of a regulatory framework for power offtake and the need to maximize generation in a lower wind speed environment. However, as has been the case for more than 70 years, the creative solutions developed here will impact the global offshore wind market.”

Those challenges, which the report examines in some detail, mean that the lease sale may not generate record bids.

• UPDATE: BOEM has been providing round by round coverage of the sale HERE that indicates that bidding was far lower than for East Coast sites. More on that to follow

“Lower auction prices could mean that project developers will have more room to maneuver, coming up with inventive deployment and offtake strategies,” notes the report. “These tactics in turn have the potential to be applied elsewhere, driving the entire industry forward to new frontiers.”

A further challenge, of course, is that accessing U.S. Gulf offshore wind energy resources will involve deploying floating wind technology.

The report, prepared in partnership with the New Orleans based GNO Wind Alliance, breaks down the offshore wind development process and highlights Gulf-based companies that have already been participating in the industry —despite the lack of projects in Gulf waters to this point. More than one in five offshore wind contracts identified by the Business Network’s Market Dashboard have gone to companies based in the Gulf of Mexico, demonstrating the region’s strong expertise.

• Download the report HERE