BOEM holds firm on timeline for next US offshore lease auctions

Despite intense and growing developer interest in US offshore wind zones, the federal government is sticking to its leasing schedule – with a planned lease auction off Massachusetts still on track for later this year, one off New York in 2019 or 2020, and a potential sale off California likely still at least a few years away.

First up for the Bureau of Ocean Energy Management (BOEM), the Interior Department agency that conducts lease sales in federal waters, is Massachusetts.

Just three years ago, two zones off Massachusetts received no interest from bidders when put up for auction. Since then, however, the market for offshore wind has been transformed in New England, with Massachusetts earlier this year contracting for 800MW with Vineyard Wind and planning another big request for proposals next year.

“We anticipate a lot of interest in those [two remaining] areas,” James Bennett, head of BOEM’s renewable energy programme, said Wednesday at an industry conference hosted by the American Wind Energy Association.

“We’re looking at a final sale notice in the fall, and this is the fall – so very soon we’re going to have a final sale notice,” Bennett says. “We plan to have that auction by the end of this year.”

A broad range of developers – from renewables players like EDF Renewables to oil and gas players like Shell – are considering participating in the Massachusetts lease auction.

The next US lease sale – off New York – may not come until 2020, despite New York and New Jersey having both adopted large offshore wind targets and pushing for the opening of more development zones.

The sluggish timeline is especially tricky for New York, which plans to launch an 800MW offshore tender by the end of this year, but has only one large development zone – controlled by Norway’s Equinor – off the southern coast of Long Island. Deepwater Wind will sell offshore wind power into Long Island from its South Fork offshore project, but that zone is relatively far from the massive load centre of New York City.

“We need additional lease areas to be identified and leased expeditiously by the federal government,” Doreen Harris, director for large-scale renewables at the New York State Energy R&D Authority, told the conference this week.

“We’re in a circumstance where between New York and New Jersey we really have, in our view, a centre of gravity emerging in the offshore wind market,” Harris says. “And to really expedite its development, to bring forth that supply chain, the competition, and the opportunities for the industry at large, we need more lease areas that are responsibly sited as soon as possible.”

To jumpstart BOEM’s time-consuming process, New York identified and meticulously studied potential lease areas in its Bight region to the south of Long Island. BOEM is now in its so-called Call for Information & Nominations stage for the New York Bight, which precedes a lease sale.

While acknowledging that “there’s a lot of pressure to develop areas in New York”, Bennett said that a lease sale will come “if not in 2019 then sometime in 2020”, repeating BOEM’s previous guidance.

BOEM’s process is “well designed and defined”, Bennett said, but it “does take a long time” – potentially as long as 10 years from the beginning to getting steel in the water.

BOEM is also in the relatively early stages of preparing a potential lease sale in California, where floating turbines would be necessary due to the greater water depths off the West Coast. Last month, BOEM held its first task force in two years on California offshore wind, with four areas now identified as possible development zones.

Along the central coast are the Morro Bay, Morro Bay North, and Diablo Canyon zones.

“These are good wind areas,” says Joan Barminski, BOEM’s Pacific regional director. “They’re close to infrastructure, in particular tie-ins for the transmission, and also close to load centres – primarily Los Angeles but [the power] could also go north towards San Francisco.”

Meanwhile, a fourth zone known as the Humboldt area has been formally identified off the coast of Northern California. “The load centre here is small”, Barminski notes, but the project has the backing of the Redwood Coast Energy Authority, a community choice aggregator that delivers power locally.

BOEM’s next step for California would be to formally shift into the Call for Information & Nominations stage. It’s possible that additional development areas still could be added, Barminski says.

A potential lease auction is still a ways off in California. Even after an auction has taken place, it takes developers five or more years to bring projects through BOEM’s remaining permitting stages – and then install the turbines.

Streamlining the federal permitting process is among the US offshore wind industry’s top priorities as it thinks about the market in the decade to come.