New York Offshore Wind Auction Ends With Mammoth Bid

Posted by Betsy Lillian on December 19, 2016 No Comments
Categories : Featured, New & Noteworthy

An auction for the rights to develop a wind farm in federal waters off Long Island, N.Y., shattered records on Friday. After 33 rounds and more than a day of bidding, Statoil, with a bid of nearly $42.5 million, emerged victorious.

The auction was held by the U.S. Department of the Interior’s (DOI) Bureau of Ocean Energy Management (BOEM). Bidding by six initial parties was halted for the day on Thursday at 6:30 pm and resumed on Friday at 8:30 am. The final bid of $42,469,725 was placed by Statoil Wind US LLC for the rights to develop an area of nearly 80,000 acres, according to the American Wind Energy Association (AWEA).

“Investment from such an established player in the offshore oil and gas industry illustrates how offshore wind is the next frontier in energy development,” comments Nancy Sopko, manager of advocacy and federal legislative affairs for AWEA. “Over the past decade, there has been consistent progress toward the realization of offshore wind power’s potential in America. The completion of [this] auction increases the strong momentum building to develop more of this ocean energy resource.”

According to the Natural Resources Defense Council, the whopping $42.5 million bid totals more than double the amount paid for all of BOEM’s 11 previous wind auctions combined.

Statoil says the lease comprises an area that could potentially accommodate more than 1 GW of offshore wind; phased development is expected to start with 400 MW to 600 MW. The New York Wind Energy Area, located 14-30 miles offshore, spans 79,350 acres and covers water depths of 65-131 feet (20-40 meters).

The DOI adds that the lease area consists of five full Outer Continental Shelf blocks and 143 sub-blocks. (A map of the lease area can be found here.)

“We are excited to have submitted the most competitive bid in a highly attractive project, Statoil’s first offshore wind lease in the United States,” says Irene Rummelhoff, Statoil’s executive vice president for new energy solutions.

According to the DOI, other participants in the auction included Avangrid Renewables LLC, DONG Energy Wind Power (U.S.) Inc., Innogy US Renewable Projects LLC, the New York State Energy Research and Development Authority, and wpd offshore Alpha LLC.

Before the lease is executed, the Department of Justice and Federal Trade Commission will conduct an anti-competitiveness review of the auction. The provisional winner will then be required to pay the winning bid and provide financial assurance to BOEM.

The lease will have a preliminary term of one year, during which the lessee may submit a site assessment plan (SAP) to BOEM for approval. The SAP will describe the facilities (e.g., meteorological towers or buoys) a lessee plans to install or deploy for the assessment of the wind resources and ocean conditions of its commercial lease area.

Following approval of a SAP, the lessee will then have four-and-a-half years to submit a construction and operations plan (COP) to BOEM for approval. This plan will provide a detailed proposal for the construction and operation of a wind energy project within the lease area, says the DOI.

“We will work closely with the New York State Energy Research and Development Authority on these studies and throughout the permitting process and in connection with power off-take options,” says Rummelhoff.

Once BOEM receives a COP, it will conduct an environmental review of the proposed project and reasonable alternatives. The DOI says public input will be an important part of BOEM’s review process. If BOEM approves the COP, the lessee will then have a term of 25 years to construct and operate the project.

“This auction underscores the growing market demand for renewable energy among our coastal communities,” states Sally Jewell, DOI secretary. “It not only marks another milestone for the U.S. offshore wind energy program, but also demonstrates how our collaborative efforts with state, local and private-sector partners can advance a clean energy future in the United States.  I’m proud of what the Interior Department has accomplished over the past eight years to build a strong foundation to harness the incredible potential of offshore wind.”

Liz Gordon, director of the New York Offshore Wind Alliance, says the auction “demonstrates yet again just how much potential that offshore wind has to transform New York’s energy landscape in powerful ways.”

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