Two energy companies submitted winning bids Tuesday to build floating offshore wind turbines in the Gulf of Maine, committing nearly $22 million for half the area available in the largest offshore wind lease sale in the United States.
The lease sale auction, conducted by the federal Bureau of Ocean Energy Management, moves Maine closer to establishing a presence in the budding wind energy industry by capitalizing on its access to the Atlantic coastline.
Avangrid Renewables LLC of Portland, Oregon, a unit of Avangrid Inc., and a subsidiary of Spanish energy giant Iberdrola, bid $4.9 million for 98,565 acres and $6.2 million for nearly 125,000 acres. The two areas leased by the federal government are about 30 nautical miles from Massachusetts, officials said.
Invenergy NE Offshore Wind LLC, which has two wind leases off the coasts of California and New Jersey, bid $4.9 million for 97,854 acres about 46 nautical miles from Maine and $5.9 million for 117,780 acres about 22 nautical miles from Massachusetts.
More than a dozen businesses were eligible to participate in the auction, according to the Bureau of Ocean Energy Management. Avangrid Renewables and Invenergy NE Offshore Wind were the only bidders and each could bid on a maximum of two leases, federal officials said.
The leased areas have the potential to power more than 2.3 million homes, the bureau said. In all, the federal government sought to lease eight areas within the 850,000-acre site.
The successful bids move Maine closer to staking its claim in offshore wind development, though it will likely be a decade or so before wind turbines begin operating in the Gulf of Maine. Federal officials said the leases do not authorize the construction or operation of offshore wind facilities, but give the successful bidders the right to submit a project plan for review by the Bureau of Ocean Energy Management. The agency will analyze and report on the impacts of project proposals before deciding whether to approve a plan to build and operate a turbine.
Avangrid said its two lease areas have the potential to deliver 3 gigawatts to New England. The lease areas offer strong wind speeds and relatively shallow water within the limits of floating wind technology, it said. While floating platforms can be installed in deeper water than turbines attached to sea-floor foundations, floating platforms are still tethered to the sea floor with anchors and chains or cables.
Massachusetts last month selected a 791-megawatt wind project proposed by Avangrid. With other wind energy projects in New England and the South, Avangrid says it has the largest offshore development portfolio by acreage in the Northeast.
Daniel Runyan, senior vice president and head of offshore wind development at Invenergy, said its “participation demonstrates Invenergy’s steadfast commitment to advancing the American offshore wind industry.”
Anne Reynolds, vice president for offshore wind at the American Clean Power Association, said the auction builds on previous deep water auctions on the West Coast, helping put the U.S. “on track to become a global leader in floating offshore wind technology.”
In legislation enacted last year, Maine called for wind energy development of at least 3 GW of capacity from federal waters by 2040. The lease sale and Maine’s power procurement planning are a “significant step” to achieving that goal, Reynolds said.
Other environmental and labor advocates praised the auction results.
Pasha Feinberg, director of renewable energy at the Ocean Conservancy, said protections and monitoring of fish, whale populations and habitats, in addition to data sharing, “are a win for the ocean and marine life.” Environmental requirements included in lease stipulations make it possible to avoid negotiation in the project permitting process, she said.
Jeff Marks, executive director of ClimateWork Maine, a business group working on climate issues, said the auction results will “help build a strong and competitive Maine-based offshore wind industry and supply chain.”
“If Maine is to compete on a global scale, the state must attract financial investment,” he said. “Maine’s floating offshore wind industry is a competitive market advantage in the energy sector, with the possibility of developing skilled labor, new technologies, new product lines and new projects.”
Jason Walsh, executive director of the BlueGreen Alliance, which advocates for labor unions and environmentalists, said the lease sale is a “promise to the nation that we can have clean, renewable energy and good-paying jobs in coastal states.”
Federal officials last week rejected Maine’s application for $456 million to build an offshore wind port at Sears Island. The decision by the U.S. Department of Transportation complicates Maine’s effort to establish a presence in the offshore wind energy industry. The state has said it will continue to seek funding, and the Natural Resources Council of Maine said the lease sale “bolsters Maine’s leadership on floating offshore wind,” with the developers of the lease areas poised to serve as potential commercial partners for a proposed offshore wind port on Sears Island.
The Biden administration said lease stipulations require energy companies to “make every reasonable effort” to enter into project labor agreements during construction and develop communication plans for engagement with Tribes, agencies and fisheries. Project labor agreements are negotiated contracts with labor unions during construction projects spelling out wages and other conditions of employment. The agreements seek to eliminate disputes and work stoppages, while critics say they drive up costs and steer money to labor unions allied with Democrats.
The Department of the Interior, which operates the Bureau of Ocean Energy Management, said it has now approved 10 commercial scale offshore wind energy projects, from zero at the start of the Biden administration in January 2021, and OK’d more than 15 GW of energy from offshore wind projects, enough to power more than 5 million homes.
Biden has made offshore wind a key to decarbonize the electricity grid by 2030. But rising costs and supply chain disruptions have slowed development and raised doubts about whether his administration’s goal of installing 30 GW of offshore wind this decade is attainable.
Send questions/comments to the editors.
We invite you to add your comments. We encourage a thoughtful exchange of ideas and information on this website. By joining the conversation, you are agreeing to our commenting policy and terms of use. More information is found on our FAQs. You can modify your screen name here.
Comments are managed by our staff during regular business hours Monday through Friday as well as limited hours on Saturday and Sunday. Comments held for moderation outside of those hours may take longer to approve.
Join the Conversation
Please sign into your Press Herald account to participate in conversations below. If you do not have an account, you can register or subscribe. Questions? Please see our FAQs.