Offshore wind

First Pacific US Offshore Wind Auction Attracts $757 Million

Rights to five lease tracts offshore California have been awarded to five separate operators.

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The sale included two tracks off Northern California near Eureka, and three tracts further south offshore near San Simeon.

The US Bureau of Ocean Energy Management (BOEM) wind energy auction for five leases offshore California drew competitive high bids from five companies totaling $757.1 million.

The California sale on 7 December represents the third major offshore wind lease sale this year and the first ever for the Pacific region. The Carolina Long Bay auction held in May attracted $315 million in just two high bids. The New York Bight sale held earlier in the year netted almost $4.4 billion in winning bids.

“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 Interior 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 the 7 December sale is a further step toward achieving President Joe Biden’s goal of deploying 30 GW of offshore wind energy capacity by 2030 and 15 GW 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,” said BOEM Director Amanda Lefton. “This auction commits substantial investment to support economic growth from floating offshore wind energy development—including the jobs that come with it.”

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 GW of offshore wind energy, enough to power more than 1.5 million homes.

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The lease sale included a 20% 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 US domestic supply chain for the floating offshore wind energy industry, or both. The credit will result in more than $117 million in investments for these 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 affected 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.