Offshore Wind Auction Unlocks the Potential for Green Energy in the US

America’s offshore wind resources are just beginning to be developed, and this will be a big boost towards the change to green energy. Until recently, wind energy was an untapped resource in the US, but that is changing.

Last December, a highly competitive auction for offshore wind leases off the Massachusetts coast went for a record-breaking $405 million. The auction had a total of 11 companies participating, including global leaders of land wind energy and offshore energy development bidding on 390,000 acres of federal waters that are almost 20 miles south of Martha’s Vineyard.

Before this auction, the highest offshore wind auction grossed $42 million in 2016 for a lease area In New York. “We are completely blown away by this result,” Walter Cruickshank, acting director of the US Bureau of Ocean Energy Management, said in a press conference after the auction ended.

The leases were purchased by Equinor, a Norwegian company, Mayflower Wind Energy, a joint venture between Royal Dutch Shell and EDP Renewables, and Vineyard Wind, which is controlled by Spain’s Iberdrola and Copenhagen Infrastructure Partners. Each of these international companies will pay $135 million to the US government for the rights to build wind turbines in their sections.

The Bureau of Ocean Management (BOEM) said that when fully developed, the areas could support 4.1 gigawatts of commercial wind generation and provide enough energy to power 1.5 million homes.

“To anyone who doubted that our ambitious vision for energy dominance would not include renewables, today we put that rumor to rest,” said US Secretary of the Interior Ryan Zinke said in a BOEM announcement. “With bold leadership, faster, streamlined environmental reviews, and a lot of hard work with our states and fishermen, we’ve given the wind industry the confidence to think and bid big.”

In 2015, the rights to two vast lease areas that were much closer to shore and easier and cheaper to develop sold for less than $300,000 each according to the Boston Globe. And the offshore leases that just sold in the auction were offered in 2015, but there were no bidders. But a lot of things have changed for the better in three years.

First, the state laws have changed, in 2016, the Massachusetts legislature required the states large utilities to seek contracts for up to 1,600 megawatts of offshore wind. In July, another law was passed to allow for an additional 1,600 megawatts by 2035.

There have also been significant improvements in wind technology. The wind turbines will be much larger and in deeper waters to take advantage of the economies of scale according to the Boston Globe. Being further away from shore will mean fewer complaints from property owners (something that caused earlier attempts on wind turbines in that area to fail).

Before the leases are executed, there are a lot of bureaucratic hoops to jump through. The US Department of Justice and Federal Fair Trade Commission will conduct an anti-competitiveness review of the auction according to the BOEM. Then the lessees must submit Site Assessment Plans for approval, and then the lessees will have four and a half years to submit detailed Construction and Operations plans. After all of this is completed, the auction winners will have a term of 33 years to construct, operate, and reap the benefits of the sites.

The offshore wind turbines will do much more than just increase federal revenue. The construction will bring much-needed jobs to the local economy too. And the addition of clean green energy to replace the use of oil and natural gas is very welcome news. Massachusetts is now on the map for wind power.