U.S. Offshore Wind Auction Attracts Record-setting Bids

The largest ever U.S. sale of offshore wind development rights - for areas off the coasts of New York and New Jersey - attracted record-setting bids on Wednesday from companies seeking to be a part of President Joe Biden's plan to create a booming new domestic industry.

It is the first offshore wind lease sale under Biden, who has made expansion of offshore wind a cornerstone of his strategy to address global warming and decarbonize the U.S. electricity grid by 2035, all while creating thousands of jobs.

With bidding still underway, the auction was on track to easily top the $405 million U.S. offshore wind auction record set in 2018, according to updates posted on the U.S. Bureau of Ocean Energy Management's (BOEM) web site.

After 11 rounds, bidding stood at a record-setting $250 million for a single lease 32 miles (51.5 km) off the coast of New Jersey. The government had identified that 114-acre area - the largest offered in the sale - as being capable of producing power for more than 485,000 homes.

The previous record amount paid for a U.S. offshore wind lease was $135.1 million in 2018 for a lease off the coast of Massachusetts.

High bids on each of the other five areas in the auction ranged between $12.6 million and $134.3 million as of Wednesday afternoon.

The auction's scale marks a major step forward for offshore wind power in the United States, which has lagged European nations in developing the technology. Currently, the United States has just two small offshore wind facilities, off the coasts of Rhode Island and Virginia, along with two additional commercial-scale projects recently approved for development.

BOEM, which has not held an auction for wind leases since 2018, is offering 488,201 acres (197,568 hectares) in shallow waters between New York's Long Island and New Jersey, an area known as the New York Bight.

The area is 22% smaller than what was initially proposed last summer due to concerns about the developments' impact to commercial fishing and military interests.

'ENOUGH WIND TO POWER MILLIONS OF HOMES'

The sale's 25 approved bidders include entities controlled by Equinor ASA, Avangrid Inc, BP Plc and Eletricite de France SA, according to government documents. Each bidder may only win one lease.

The energy generated from the newly offered areas could one day power nearly 2 million homes, the administration has said.

Last year, the Biden administration set a goal of installing 30 gigawatts (GW) of offshore wind by 2030 along the nation's coastlines. Much of the current development is happening in waters off of Northeastern states.

New York and New Jersey have set targets of building more than 16 GW of offshore wind by 2035, and Wednesday's lease areas - which lie between 20 and 69 nautical miles off the coast, according to BOEM - could deliver more than a third of that capacity.

"That's enough wind to power millions of homes," Ed Potosnak, executive director of the New Jersey League of Conservation Voters, said in an interview. "That's a big deal in a state with about nine million people."

Not everyone supports offshore wind development. The Biden administration's ambitions have stoked concerns among commercial fishermen and coastal communities about harm to their livelihoods and property values.

In January, a group of New Jersey residents sued BOEM over its leasing plans for the New York Bight. The group, from the summer colony of Long Beach Island, is concerned about the aesthetic impacts of the turbines and potential lost tourism.

Greg Cudnik, owner of a fishing charter boat business on Long Beach Island, worries about what thousands of wind turbines will do to the ocean habitat.

"For all this that's taking place and all this that is put in jeopardy, to me, I don't see the net benefit," Cudnik said.