BOEM Raises $315 Million in Second Wind Lease Auction of 2022

Carolinas Wind auction results
Carolinas auction raised $315 million and could add 1.3 GW to the U.S.'s offshore wind energy capacity (file photo)

Published May 11, 2022 5:59 PM by The Maritime Executive

The U.S. Department of the Interior completed its second offshore wind lease auction of 2022 raising $315 million for the Carolina Long Bay Lease areas. While not large as the record-breaking New York Bight auction in February 2022, it was still viewed as consequential as it was the third lease area offered off the Carolinas and the second auction for the Biden Administration coming shortly before a pending moratorium on wind leases in the region. 

Bidding in the online auction began this morning at just over $2.7 million each for the two lease areas. There were four bidders for one of the areas and five on the other. Sixteen bidders had pre-qualified to participate in the auction with Duke Energy, BP, Equinor and Ørsted having all previously expressed interest in the areas. Avangrid Renewables won the rights to the two prior lease areas sold off the Carolinas. Today’s bidding went through 18 rounds concluding in the afternoon. 

TotalEnergies Renewables was named the provisional winner for one of the leases offered today with a bid of $160 million. The provisional winner for the other lease, with a bid of $155 million, is Duke Energy Renewable Wind. Duke had recently announced plans to more than double its investments in renewable energy while phasing out its remaining coal-fired power plants by 2035. Each company will now need to complete leases with the Department of the Interior’s Bureau of Ocean Energy Management (BOEM) with experts estimating it will be at least eight years before the two sites would begin producing energy.

Combined, the two lease areas, which start at a point about 14 miles off the Carolinas’ coast, cover 110,091 acres, an area that BOEM estimates could result in at least 1.3 gigawatts of offshore wind energy, enough to power nearly 500,000 homes. The lease area, however, was reduced by 14 percent from the proposal in November 2021. According to the BOEM, the proposed areas were reduced to avoid conflicts with ocean users and minimize environmental impacts. The fishing community, however, continues to oppose the development.

The Carolina Long Bay offshore wind auction included a new 20 percent credit for bidders that committed to a monetary contribution to programs or initiatives that support workforce training programs for the offshore wind industry, development of a U.S. domestic supply chain for the offshore wind energy industry, or both.

“This lease sale shows the strong demand for clean energy, and it should also be a sign to Congress to repeal the 10-year moratorium on offshore wind leasing off the coasts of North Carolina, South Carolina, Georgia, and Florida,” said Heather Zichal, CEO of the industry trade group American Clean Power.

BOEM needed to complete the auctions before July 1 when the moratorium imposed by former President Donald Trump is due to go into effect. It bans through 2023 all new offshore leasing activity, including oil and gas, from North Carolina to the Florida Keys. Efforts have been proposed in the U.S. Congress to repeal the moratorium but have not yet been completed.

The Biden Administration has been moving forward with its plans to accelerate wind lease auctions as part of the goal to reach 30GW offshore wind energy production by 2030. In addition to the New York Bight and now the Carolina Long Bay area, BOEM identified in October 2021 as part of its path forward up to five additional potential lease sales by 2025. These range from offshore California and Oregon, as well as in the Central Atlantic, Gulf of Maine, and the Gulf of Mexico. Tentative timelines anticipate an auction for sites off northern California in the third quarter of 2022 and potentially the first sale in the Gulf of Mexico by late 2022. The Central Atlantic and Oregon Coast locations are targeted for 2023 auctions while the first Gulf of Maine auction is expected in mid-2024.