NY Bight Wind Auction Still Going After Breaking Records at $3.35B

Bidding for the six offshore wind leases that make up the New York Bight will continue for a third day on Friday with even industry analysts surprised by the level of interest and prices in the hotly contested auctions. Bidding broke records on its first day with the expectation being that it would conclude when it resumed today. Instead, when the bidding was again paused this evening the total value of the leases had more than doubled with strong competition continuing.

The U.S. Department of the Interior is offering six leases with the rules of auction establishing that each bidder can ultimately win only one of the six leases for the parcels that make up nearly a half million acres of ocean off New York and New Jersey. The Bureau of Ocean Management (BOEM) is conducting the auction with bidding proceeding the first day at 30-minute intervals starting at 9:00 a.m. and today at 20-minute intervals.

BOEM’s online tally now shows that they have completed 46 rounds of bidding with a total of 12 bids for five of the properties in the latest round. The cumulative total of the bids now stands at an astonishing $3.35 billion which equates to $6.7 million per acre. Bidding began Wednesday morning at a combined total of $48.7 million and after 21 rounds on Wednesday reached $1.535 billion for the six leases

The lowest-priced parcel, which is the smallest, northernmost near the entrance to New York harbor and Long Island, yesterday appeared to be topping out at $75 mullion and after sitting dormant for most of today’s rounds received new bids and now stands at $140 million. The other properties currently stand at $390 million, $570 million, $630 million, $690 million, and an astounding $900 million. Round 47 is scheduled to start tomorrow at 9:00 a.m. with none of the experts daring to venture a guess on how many more rounds might yet come before the six winners are decided.

The New York Bight auction is the first for the Bidden administration and the first in the U.S. since December 2018. When the last auction concluded, the Trump administration boasted of setting new records of $450 million for approximately 390,000 acres offshore Massachusetts. That equated to just over $1 million per acre with this new auction currently having exceeded the prior record by at least six times that per acre. The 2018 auction was for the areas that could support approximately 4.1 gigawatts of commercial wind generation, with Equinor Wind, Mayflower Wind Energy, and Vineyard Wind as the provisional winners. The New York Bight is expected to provide nearly 6 GW of power when the six parcels are fully developed.

At least a dozen companies or bidding groups were believed to be competing in the auction with BOEM reporting that it had qualified 25 companies. The bidders are making a significant commitment to offshore wind energy as winning the auction is just the first step in a multi-year process that requires significant financial investments. The provisional winners need to complete the leases with the BOEM and submit first site assessments and site plans and then move to construction plans and approvals. They also need to reach offtake agreements with the local power authorities. The timing for the process is such that bidders are not likely to reach commercial production on any of these properties until the end of this decade.