US Announces Record-Breaking Offshore Wind Lease Sale

The US Department of the Interior (DOI) informed on 12 January that the Bureau of Ocean Energy Management (BOEM) will hold an offshore wind auction for the New York Bight next month, which could lead to up to 7 GW of offshore wind energy capacity being brought to the country’s energy mix.

Illustration; Photo source: NYSERDA

BOEM, which has issued a Final Sale Notice, will hold the lease sale on 23 February, with six areas available for offshore wind developers to bid for – the most areas ever offered in a single auction and the first offshore wind lease sale to be organised under the Biden-Harris administration, which set a target of 30 GW of installed offshore wind capacity by 2030 at the beginning of last year.

New York Bight lease areas; Image: BOEM

With more than 480,000 acres offered in the New York Bight area, located in federal waters offshore New York and New Jersey, the leases for the six sites could result in the US adding from 5.6 GW to 7 GW of offshore wind energy, enough to power nearly 2 million homes. As offshore wind technology continues to advance, these areas may have the potential to produce even more clean energy, according to a press release from the Department of the Interior.

“We are at an inflection point for domestic offshore wind energy development. We must seize this moment – and we must do it together”, said Secretary of the Interior Deb Haaland.

The news comes just days after New York Governor Kathy Hochul announced USD 500 million for offshore wind development and said the state would launch its next offshore wind energy procurement in 2022, expected to result in at least 2 GW of new projects.

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The launch of the lease sale follows BOEM’s update from last month, when the government agency said that it had completed its environmental review of potential impacts from offshore wind energy leasing activities in the New York Bight and found no significant impact for the area.

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The Proposed Sale Notice (PSN) that BOEM issued back in June 2021 included up to eight lease areas for potential commercial wind energy development with a potential to unlock more than 7 GW of offshore wind capacity.

According to the latest information in the DOI’s press release, BOEM reduced the initially identified acreage (1,735,154 acres) by 72 per cent to avoid conflicts with ocean users and minimise environmental impacts, following review of scientific data, and extensive input from the commercial fishing industry, Tribes, partnering agencies, key stakeholders, and the public.

New York Bight Auction to Include New Lease Stipulations

Announcing the launch of the lease sale, Secretary Deb Haaland said offshore wind opportunities like the New York Bight presented a once-in-a-generation opportunity to fight climate change and create good-paying, union jobs in the US.

Together with New Jersey Governor Phil Murphy, New York Governor Kathy Hochul, and Liz Shuler, President of the American Federation of Labor and Congress of Industrial Organizations, Secretary of the Interior outlined a shared vision for developing a robust offshore wind domestic supply chain that will deliver benefits to residents of New York and New Jersey and the surrounding region, including underserved communities.

This collaboration will serve as a model for future engagement and establish the US as a major player in the global offshore wind market, according to the DOI.

The New York Bight offshore wind auction will include several innovative lease stipulations designed to promote the development of the domestic supply chain and enhance engagement with Tribes, the commercial fishing industry, other ocean users, and underserved communities.

The stipulations will also advance flexibility in transmission planning and make use of project labor agreements throughout the construction of offshore wind projects. Stipulations include incentives to source major components domestically – such as blades, turbines, and foundations – and to enter into project labour agreements to ensure projects are union-built.

To advance the Department of Interior’s environmental justice and economic empowerment goals, the Sale Notice also requires lessees to identify Tribes, underserved communities and other ocean users who could be affected by offshore wind development.

The Interior Department will hold companies accountable for improving their engagement, communication and transparency with these communities, the DOI said.

Business Network for Offshore Wind welcomed the news for New York Bight, saying the leasing creates a globally attractive market and is a giant step towards realising the goal of developing 30 GW of offshore wind by 2030.

“These six new lease areas will draw in new investors and developers to the U.S. market and foster the competition that will catalyze major supply chain development regionally and nationally”, said Liz Burdock, president and CEO of the Network.

“Sustaining this momentum is critical to the federal government to support the new but quickly growing U.S. offshore wind manufacturing base and supply chain. With its potential to supply large-scale and dependable clean energy, the responsible development of offshore wind is still our best strategy to quickly decarbonizing our economy and mitigating the effects of climate change.”