Wind Energy – U.S.A.
The highly anticipated auction for the six offshore leases in the New York Bight proceeded throughout the day and was recessed to resume tomorrow as the leaders in the industry battle for nearly half a million acres off the coast of New York and New Jersey.
The first auction held by the U.S. Bureau of Ocean Energy Management (BOEM) since 2018, is also the largest in U.S. history and the first under the Biden administration.
Plans for the auction were announced in January as a centerpiece of the Biden administration’s effort to accelerate the development of offshore wind in the United States and to catch up for time lost over the past four years during which no auctions had been conducted. The Biden administration has set a target of installing 30 gigawatts of offshore wind power by 2030 with the potential for the New York Bight to provide possibly a quarter or more of the target providing power for nearly two million homes.
BOEM opened the action yesterday reporting that it had qualified 25 bidders to compete for the six licenses after validating their legal, technical and financial qualifications. Among the companies qualified to bid were majors including Equinor, BP, Avangrid, and EDF of France. Under the rules of the auction, each bidder may win only one lease.
The opening bidding started at a total of $48.7 million and proceeded through 21 rounds before BOEM announced that it was recessing the bidding at 6:00 p.m. and would resume the auction tomorrow, February 24 at 9:00 a.m. As of the pause tonight the total bids had reached $1.535 billion for the six leases with the number of bids for each lease ranging between one and five per round.
Currently, five of the auctions appear to remain hotly contested with the sixth, a smaller parcel located in the furthest north position closest to Long Island and the entrance to New York harbour, having stopped at $75 million with three bidders remaining. BOEM raised the bid on this property to $100 million and it failed to receive additional bids in the last two rounds.
The other five parcels had opened in a range between $7 million and $12.6 million. At the end of the 21st round, they stood in a range between $180 million and $410 million. The highest-priced auction is a parcel in the middle of the range off New Jersey and remains the most hotly contested with five active bids in the last round.
BOEM will continue to provide round-by-round updates on this online auction. Shortly after the auction ends, the Department of the Interior reports it will announce the provisional winners for each of the lease areas.