In the latest Biden administration push to meet its target to deploy 30 GW of U.S. offshore wind energy by 2030, Interior Secretary Deb Haaland said that her agency jumpstarted the process announced in March to lease federal ocean tracts for projects in the New York Bight area between Long Island, N.Y., and coastal New Jersey.
The preliminary lease notice, published on June 14, follows a US Interior Dept. alert on June 11 that it will also open Gulf of Mexico areas for project development, seeking builder interest and public comment.
These actions follow by just two weeks a Biden agreement with California to accelerate projects in the Pacific. Also on June 9, North Carolina Gov. Roy Cooper signed an executive order calling for 2.8 GW of offshore wind off the state coast by 2030 and 8 GW by 2040, the state's first official move into the sector.
The government notice for the New York lease, which foresees up to 7 GW of offshore wind in three designated zones, launches a 60-day comment period, with specifics on lease proposal dates and exact lease sites to follow. Most observers speculate the lease auction will be held this year.
Currently, 11 developers have indicated interest in building projects in those areas and are approved to bid by Interior's Bureau of Ocean Energy Management, the agency said. It said the areas could provide more than 9.8 GW of developable power supply.
BOEM now indicates that lease winners will have to do most construction under project labor agreements, make supply chain investments, and show benefits to underserved communities, including workforce development and minority and women-business subcontracting. Bidding teams could earn "credits" for those actions toward winning leases and offsetting costs, says the BOEM proposal.
The agency also sets a 2.5-mile-wide no-build zone in one area, Hudson South off the New Jersey coast, for commercial fishing and other marine activity. Two other areas are south of Long Island. BOEM proposes about eight lease sites, with bidders currently being allowed to bid on only one. Two areas off Long Island's Suffolk County, won't be included.
NY Gov. Andrew Cuomo said in a statement that the lease area's potential generation will aid the state's push to meet his state goal set two years ago of 9GW of offshore wind by 2035, but also "unlock the potential for 10,000 jobs and billions of dollars in private investments in New York alone."
Annie Hawkins, executive director of Responsible Offshore Development Alliance, which represents fishing interests and has been a vocal project opponent, noted developer mandates to consult on potential impacts before turbine array designs are proposed. But in a statement, she remains concerned about opening new lease areas in the Bight, "which is perhaps the most spatially conflicted area in the country."
Gulf Region Is Focus
In its Gulf of Mexico lease announcement, BOEM seeks developer interest in western and central areas of the Gulf offshore from Texas, Louisiana, Mississippi, and Alabama, and in other renewable energy technologies as well as potential environmental impacts, in the 45-day comment period.
“This is an important first step to see what role the Gulf may play in this exciting frontier,” said Haaland.
Areas eyed in the Gulf are in shallower waters where oil and gas wells are largely tapped out. But industry will be watching for any impacts from a Louisiana federal judge's June 15 decision to grant a temporary injunction to a February Biden moratorium on new Gulf oil and gas drilling leases. The halt comes in a lawsuit by 13 Republican state attorneys general who claimed dire economic impact. The pause also affected leases in other federal waters and on federal lands.
While the Gulf is prone to both slow winds and hurricane-force gales, “wind resources are good in parts of Texas and Louisiana for offshore wind development," Jim Lanard, CEO of Magellan Wind, a potential West Coast developer, told ENR. "We'll want to learn more about terrestrial transmission capacity, which is an important consideration when developers assess the value proposition that we can offer.”
The National Ocean Industries Association, which represents offshore wind and traditional energy companies, noted the proximity of an existing oil and gas supply chain. "In areas like the Gulf Coast, you will find steel fabricators, heavy lift vessel operators, subsea construction companies, helicopter service providers and more who built their experience in the oil and gas industry but will be vital in building offshore wind," said Erik Milito, association president, in a statement.
La. Governor: No 'Pie in the Sky'
Louisiana Gov. John Bel Edwards (D) last December proposed developing wind energy in the Gulf of Mexico and has been working with federal officials. "This is not some ‘pie in the sky’ promise of economic opportunity" he said. "Louisiana’s offshore oil and gas industry has played a key role in the early development of U.S. offshore wind energy in the Atlantic Ocean.
Shipyards in Louisiana and Texas are already building vessels or components to supply east coast projects, including the 472-foot, $500-million Charybdis being built in Brownsville, Texas for Dominion Energy that can install wind turbines of up to 12 MW or larger and turbine foundations. Set for completion by late 2023, it is an effort to circumvent restrictions to use of predominant foreign installation vessels that are set under the federal Jones Act, which mandates that only US-manufactured ships can leave from US ports.
European component suppliers say they need more certainty on US project approval to launch and expand America-based manufacturing.
"We know that we need to create greater certainty for offshore wind projects," BOEM Director Amanda Lefton told reporters on May 11. The federal government also will likely have to become more directly involved related to how supply chain hubs develop, particularly on the East Coast.
"We are well positioned to support a fledgling wind industry in the Gulf of Mexico by leveraging transportation, construction and engineering expertise already associated with our traditional fuels production operations offshore," an Edwards spokeswoman told Reuters.
Lanard points to Gulf region expertise in critical supply chain areas that include "a well-trained and experienced workforce and huge infrastructure assets such as ports, shipyards and steel manufacturing facilities."
The BOEM notice for the Gulf developments does not propose any project labor agreement requirements.
Federal agency officials and those from state and local governments and tribes from Louisiana, Texas, Mississippi and Alabama were set to meet to outline development plans, including leasing schedules.
Studies: Wind Energy Feasible in Gulf
Research released last year by the US Energy Dept.'s National Renewable Energy Laboratory found that offshore wind showed the best potential for electric utility-scale development in the Gulf compared to other renewable energy sources and offered "a technically feasible resource potential of 508 GW—the largest of any of the technologies analyzed, and twice the energy currently consumed in the Gulf states.”
The analysis also showed that a single offshore wind project could support about 4,470 jobs with $445 million in gross domestic product (GDP) during construction and an ongoing 150 jobs with $14 million GDP annually from operation and maintenance labor, materials, and services. These results were based on a 600-MW project offshore from Port Arthur, Texas with a commercial operation date of 2030.
"However, unique conditions in the Gulf of Mexico introduce new technology challenges such as hurricane exposure, lower winds, and softer soils that will require offshore wind technology to be adapted to not only survive these conditions, but also to demonstrate cost competitiveness in regional electric markets," said NREL.
The New York and Gulf pushes come as other administration officials predicted a larger role for private companies and lenders in driving the energy transition, with a "profound impact on where people think capital should go and what the risks will be," U.S. special presidential climate envoy John Kerry told an American Clean Power Association conference June 8. The administration has been collaborating with six major US banks and asset managers, which are set to allocate about $4.16 trillion in climate investment over the next 10 years, Kerry said.
"It is the private sector that is going to make the greatest difference here because no government has the amount of money necessary to accelerate this transition at scale," the former U.S. senator added.