Another Offshore Wind Milestone: Interior Dept. Sets Auction of OCS Wind Leases

The Department of the Interior (DOI) Bureau of Ocean Energy Management (BOEM) will on July 31 put up for auction 164,750 acres offshore Rhode Island and Massachusetts for commercial wind energy leasing. The auction will be the first ever competitive lease sale for renewable energy on the U.S. Outer Continental Shelf (OCS) and it marks "the true beginning of an offshore wind market" in the U.S., experts said.

The announcement on Tuesday follows efforts in February 2011 by former Secretary of the Interior Ken Salazar and former Secretary of Energy Steven Chu to accelerate the development of offshore wind energy on the federal OCS. The wind energy area identified by the DOI is located 9.2 nautical miles south of the Rhode Island coastline.

BOEM will auction the area as two leases: the 97,500-acre North Lease Area (Lease OCS-A0486) and the 67,250-acre South Lease Area (Lease OCS-A0487). An analysis from the Department of Energy’s National Renewable Energy Laboratory suggests that the North Lease Area has the potential for installed capacity of 1,955 MW and the South Lease Area, 1,440 MW.

Among companies that are reportedly interested in the lease are Deepwater Wind, EDF Renewable, Energy Management, Fishermens’ Energy, Iberdrola Renewables, Neptune Wind, Sea Breeze Energy, U.S. Mainstream Renewable Power, and US Wind.

The offshore wind sector in the U.S. has yet to see a commercial wind farm. Last week, the nation’s first concrete-composite floating platform wind turbines (prototypes) were deployed off the coast of Castine, Maine. Meanwhile, the much-watched Cape Wind offshore wind project under development in Nantucket Sound, Mass., could break ground this year after more than a decade of delays. Former Interior Secretary Salazar was widely quoted this April as expressing optimism about the $2.6 billion project because it had secured agreements with utilities to purchase about 75% of its produced power.

But according to Seth Jaffe, an attorney with Foley Hoag LLP’s Environmental Law division, "Even though it now looks as though Cape Wind will eventually get to the finish line, this competitive lease auction, for areas off the coast of Rhode Island and Massachusetts, can really be seen to mark the true beginning of an offshore wind market."

Jaffe notes, however, that the leases will not authorize construction of wind projects. They will only authorize implementation of the Site Assessment Plan and then the Construction and Operations Plan. Only after additional environmental reviews would construction of the projects be authorized. "Nonetheless, this seems as though it’s the real thing. In the fullness of time, we’re going to see turbines in these waters," he said.

Sources: POWERnews, DOI, Foley Hoag LLP

—Sonal Patel, Senior Writer (@POWERmagazine, @sonalcpatel)