Competitive offshore leases for wind energy will be auctioned off by the US federal government for the first time ever on 31 July.
The two wind farm leases are off the coasts of Rhode Island and Massachusetts and cover 150 square miles and 100 square miles, respectively. We’ve got the 97,500-acre North Lease and the 67,250-acre South Lease.
We may also see another auction for a wind farm lease off the coast of Virginia in the near future, but so far a date has not been set for this.
This is only the tip of the iceberg, according to the federal government. With only the July auction, the North Lease has 1,955 megawatt capacity, while the South Lease has 1,440 megawatt capacity.
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Who wants to get in on the first US offshore wind farm auction, which promises enough electricity in the two leases to power over 1 million homes?
Right now we’re looking at nine bidders: Deepwater Wind, Energy Management Inc (of the Cape Wind project), Electricite de France SA, Fishermen's Energy LLC, Iberdrola SA, Neptune Wind LLC, Sea Breeze Energy LLC, U.S. Mainstream Renewable Power (Offshore) Inc, and US Wind Inc.
Deepwater Wind is sitting pretty for this one, as it already has a joint development agreement with Rhode Island.
The offshore Rhode Island leases might not represent the first offshore wind project, but it is the first offshore auction. The first offshore wind project to be approved was Cape Wind, in 2010, but it’s still raising money for development. Another Rhode Island offshore wind venture, Deepwater Wind, is racing to be Cape Wind to the punch. Deepwater hopes to start operations in 2015, while Cape Wind is hoping just to begin construction later this year.
But while the Obama administration is lauding this as a giant step towards strengthening US energy competitiveness, Republicans are balking.
Republicans are criticizing the auction announcement on the basis that the five-year plan for auctioning off offshore oil and gas leases did not include the East Coast, where lease sales were earlier cancelled over the Deepwater Horizon disaster in 2010.
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Basically, the grievance is that this is a double standard—what applies to oil and gas does not apply to alternative energy.
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Republicans are now hoping to push through legislation in the House that would force Obama to sell drilling leases offshore Virginia, and the East Coast wind farm auction will give this more impetus.
The difference, of course, is environmental. The date was set for the wind farm lease auction once the Ocean Energy Bureau officially concluded that the development of these wind farms would have no real negative impact on the environment.
By. Charles Kennedy of Oilprice.com
