US Offshore Wind Bids Worth $1.54 Billion; More to Come on Thursday

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The United States of America is conducting an important auction for offshore wind energy beyond the coasts of New York and New Jersey. The auction has attracted a record $1.5 billion in bids until now and the exercise will continue on Thursday as well, as informed by the U.S. Bureau of Ocean Energy Management (BOEM).

The department has said that after a marathon run of 21 rounds in the bidding process, the combined live bids for the 6 leases was worth $1.54 billion. The department website says that 14 companies participated in the auction without naming them specifically.

A government document published in January 2022 had named companies controlled by Equinor ASA, Avangrid Inc, BP Plc and Electricite de France SA etc. as ‘approved bidders.’

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The present auctions have broken the previous record of $405 million for offshore wind energy that was established in 2018. The amount also surpasses the oil and gas auctions that happened recently for offshore reserves.

The department says that the highest bid has been of $410 million for a lease of 32 miles in the New Jersey waters. This is also the largest area in the sale covering about 46 hectares and the energy produced by the wind turbines can fulfil the electricity needs of more than 485,000 homes.

‘New York Bight’ – the shallow water area that lies between Long Island of New York and New Jersey which makes about 488,200 acres — is also on offer by BOEM. The initially approved area for wind farm development was larger but reduced by over 22 per cent due to concerns raised by stakeholders like the fishing community and US military.

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The successful auction is being seen by many as an approval to US President Joe Biden’s quest to expand the offshore wind energy to eliminate global warming risks and to decarbonize the U.S. electricity grid by 2035. This way, his administration is also looking to develop a local industry and create tens of thousands of jobs. This was the first wind lease sale under his watch.

The Biden administration claims that the clean electricity generated from this very area could power nearly 2 million homes in days to come. In 2021, the federal government announced that it will install 30 GW offshore wind by 2030 that will send electricity to 10 million American homes.

As most offshore wind activity is confined to the North Eastern states, New York and New Jersey have aim to install more than 16 GW offshore wind capacity by 2035. BOEM says that the undergoing auction may deliver more than a third of that capacity.

At present, the USA has just two small offshore wind facilities in the shallow sea waters of Rhode Island and Virginia. The present auction is expected to take America closer to leading European players in terms of offshore wind power generation and in developing the technology.