BOEM: Offshore wind lease requests pick up in the Northeast

Dive Brief:

  • The U.S Bureau of Ocean Energy Management announced this week it has reviewed two unsolicited lease requests from two developers eyeing offshore wind development off the coast of New York and Massachusetts.  
  • The proposals were not part of a formal solicitation request, the agency said, but they met the necessary qualifications to pursue the leases. 
  • PNE Wind USA and Statoil Wind US both requested leases for the same areas off the shore of Massachusetts: one 248,000-acre block and one 140,554-acre block. PNE Wind also requested to lease 40,920 acres for offshore wind development in New York. 

Dive Insight:

Interest in offshore wind development is steadily climbing after the United States' first offshore wind farm started operations at the end of last year off the coast of Rhode Island. New York Gov. Andrew Cuomo is also backing a proposed 90 MW facility off the coast of Long Island as part of his plan to have 2.4 GW of offshore wind power online by 2030 to meet renewable goals. 

Before the successful launch of the Deepwater wind project, offshore wind had a hard time getting off the ground, most notably illustrated by Massachusetts' Cape Wind project, which stalled at the verge of construction.

High development costs and the phase-out of the wind production tax credit before it was extended in 2015 all played a part in hindering offshore wind development. But with the extension of the wind PUC and Deepwater Wind's success in Rhode Island, more companies — and states — are gearing up for development.

The BOEM last year issued energy lease sales for more than 122,000 acres off the the coast of North Carolina for commercial wind development.  

To date, BOEM has awarded 11 commercial offshore wind leases, including nine through the competitive lease sale process: two in New Jersey, two in an area offshore Rhode Island-Massachusetts, two in Massachusetts, two offshore Maryland and off Virginia.

The lease sales have generated roughly $16 million in winning bids for more than a million acres in federal waters, the agency said. 

States are now jumping on board reviewing proposals. Maryland regulators are set to review two proposals for projects off its coast. Those projects come after former Maryland Gov. Martin O'Malley (D) signed into law the Offshore Wind Energy Act in 2013, creating $1.7 billion in subsidies. 

It's unclear how these unsolicited proposals will move forward. The BOEM said in a statement if they decide to move ahead with the New York application, they will post a public notice to see if there is any competitive interest in the area. For the Massacusetts' request, the agency said they plan to proceed with a competitive leasing process.  

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