Interest to build offshore wind energy projects in the Gulf of Mexico is heating up, as the U.S. Interior Dept. extends until Sept. 2 its request for comments on a draft environmental review of proposed development in nearly 700,000 acres off the coasts of Louisiana and Texas. The agency could hold an auction for the first leases as early as next year.

The agency review anticipates issuing up to 18 leases with six to eight for each lease sale. It proposed in July to reduce the originally estimated 30-million-acre Gulf lease area to two sites to avoid conflicts with fishing, navigation and wildlife and resources. These would include about 500,000 acres 24 miles from Galveston, Texas and 188,000 acres about 56 miles from Lake Charles, La.

While the U.S. Energy Dept. National Renewable Energy Laboratory says Gulf offshore wind is typically more variable than on the Atlantic coast, the targeted region is the strongest. The agency adds that a single commercial-scale project would generate about $500 million in gross domestic product during construction and support nearly 5,000 industry jobs.

"It’s not surprising that the oil and gas sector, characteristically eager to expand, is showing interest in what wind can do for them," said E and E News. "Majors and supermajors are looking for ways to green their balance sheets with renewable investments."

In previous comments to Interior, nine companies have indicated interest to develop offshore wind farms or other renewable energy sources in the Gulf.

One is Ocean Winds North America, made up of European firms EDP Renewables and ENGIE, which is 50% owner of the Mayflower Wind offshore wind project in Massachusetts. Also weighing in are Avangrid Renewables and Shell New Energies, which are developing other U.S. offshore wind projects. Germany-based RWE Energy and utility EnBW, which won federal leases in the New York Bight area lease auction held in February, also noted potential Gulf development interest.

Other respondents—France-based Total Energies, Talos Energies of Houston and Singapore-based Enterprize Energy—are traditional oil and gas companies seeking to enter the market. Total, which has operated in the U.S. since 1957 and holds Gulf oil and gas leases, teamed with EnBW on a New York Bight lease. Chicago-based Hecate Energy, which also could be a contender, is a large solar and battery storage developer, in which Spanish oil and gas firm Repsol last year acquired a 40% interest.
 

Contenders Tout Existing Infrastructure

While publicly-shared comments had redactions, large ones in certain cases to shield competitive detail, potential builders shared development plans, some that include multi-faceted renewable energy projects.

Avangrid Renewables, part owner of the 800MW Vineyard Wind offshore wind project now being built in Massachusetts, said it is interested in three sites off Texas and Louisiana. EnBW said in its redacted comments that it is interested in developing offshore wind generation and transmission.

Talos Energy, which also has existing oil and gas leases, asked Interior to clarify whether those sites could overlap with renewable energy development. It is interested in offshore wind, ocean energy, geothermal and ocean thermal energy conversion.

“Our goal is to assess and deploy the optimal combination of such technologies to enable reliable and consistent renewable energy generation,” the company said. Talos is pursuing technologies that would be commercially available in two to four years and be used on structures for oil and gas operations.

Enterprize Energy, which said it has worked before on Texas offshore wind energy and is developing projects off Vietnam and Ireland, proposes to build two 1,000-MW offshore wind farms on platforms that will be used to desalinate seawater and to produce green hydrogen from electrolyzed fresh water. The hydrogen would be sent by pipeline to the Texas hydrogen grid.  

Prospective contenders pointed to advantages of existing infrastructure and supply chain support in the Gulf to pursue offshore wind. A number of Gulf-based firms were tapped to engineer and build Block Island, the first US commercial offshore wind farm off the Rhode Island coast, which opened in 2016.

Kiewit is designing and building—at the firm's 555-acre oil and gas fabrication facility in Ingleside, Texas—the first U.S.-made offshore wind substation, to be deployed for the 132-MW South Fork wind farm under construction off Long Island, N.Y., and work could complete next year at a Brownsville, Texas, shipyard on a $500-million wind turbine installation vessel, America's first.

Tershara Matthews, Shell chief of emerging programs, noted "a unique opportunity," from the firm's decades of experience in Gulf offshore oil and gas operations, "to lead buildout of an integrated renewable energy basin, with offshore wind as a significant offshore energy generator,” and also noting land-based chemical, manufacturing and refining corridors. She said the company is the largest Gulf leaseholder and energy producer.

Ocean Winds cited supportive federal policy, favorable wind speeds, an experienced local energy sector workforce and robust port infrastructure for its interest in developing projects. The firm said it is interested in alternative energy transmission and storage options such as renewable hydrogen production and use of existing hydrogen pipelines in Texas and Louisiana.

Hecate Energy, which said it seeks to develop one or more offshore wind projects in four areas along the Texas coast, has raised more than $2 billion of financing for about 2 GW of U.S. renewables within the past 12 months.

Total Energies said it aims to be one of the top five global renewable energy companies by 2030, with US expansion eyed to help it reach that goal. The firm has 6 GW of floating and fixed offshore wind projects online or in development in the U.K., France, Taiwan and South Korea.

State Seeks Some Revenue

RWE took note of changing policies in the region, citing a climate action plan recently enacted by Louisiana Gov. John Bel Edwards with potential pathways “for a transition to a less carbon-intense economy.” He also signed a bill in June that would allow the state to sign agreements with wind energy developers operating in state waters to gain a share of generation revenue.

The U.S. Senate Energy and Natural Resources Committee in July also approved a bill that would give Gulf states 37.5% of the federal revenue from offshore wind farms located in federal waters. A bill introduced in the House by two Louisiana representatives would raise the amount to 50%.

It's unclear how the launch of an offshore wind industry, cost-intensive at first, will fit into Gulf region economies and its energy mix.

Edwards said in his State of the State address this year, that he foresees "offshore oil platforms and wind turbines side by side.” But Poiitico noted that while major Gulf region power provider Entergy is "evaluating" wind power potential, it has yet to commit to any purchase. Also Texas politicians and energy officials have yet to offer strong support.

In its comments, RWE said “the need for commercial viability requires careful consideration of accessible markets where the energy can be sold.”