'Continued interest' | US sets four new offshore wind energy areas in Gulf of Mexico with some 9GW
BOEM finalised the massive zones despite a lackluster auction in the region last summer that saw only two developers compete for a single lease
US offshore energy regulator Bureau of Ocean Energy Management (BOEM) finalised four new wind energy zones in the Gulf of Mexico holding over 9GW of potential capacity, enough to power more than 3 million homes.
After two rounds of bidding, German energy firm RWE paid a paltry $5.6m for the 102,480 acres (414.7 km2) Lake Charles lease area facing Louisiana, or $54/acre, the lowest price paid for offshore wind acreage in nearly a decade.
The two Galveston leases off Texas went untouched.
“Creating an offshore wind industry in the Gulf of Mexico will take time and partnership,” said BOEM director Elizabeth Klein.
“BOEM is pursuing another offshore wind lease sale in the Gulf of Mexico due to continued industry interest and feedback from our partners and key stakeholders,” she said.
Demand in the Gulf was suppressed by silty seabed and frequent hurricanes that contribute to higher infrastructure costs along with lower wind speeds which require larger and more efficient turbines to cost-effectively generate energy.
Gulf offshore wind power also lacks a clear offtake route. Texas, already the US’ top renewable energy market with 40GW of onshore wind and 17GW of solar, showed little interest in procuring the relatively pricy power.
Yet the Gulf is also home to a massive offshore oil & gas sector that faces an uncertain future as BOEM is restricting future extraction sales.
The IRA mandates at least one offshore oil & gas auction within one year of an at-sea wind energy round. The three potential petroleum lease sales will enable BOEM to meet the Biden administration’s goal of seven offshore wind auctions by 2025.
BOEM is also advancing offshore wind in Oregon, Gulf of Maine and Central Atlantic.
John Begala, vice president of federal and state policy at the Business Network for Offshore Wind (BNOW), touted the region's huge supply chain of steel fabricators, shipbuilders and experienced workforce.
“With nearly a quarter of US market contracts going to Gulf firms, the area is already the engine for US offshore wind industry,” he said.
“Building a robust pipeline of projects will further unlock the true potential of the region’s supply chain capacity,” he added.
The WEAs include:
- Option J: 495,567 acres some 76 km off the coast of Texas, holding around 6GW of capacity, enough to power 2.1 million homes.
- Option K: 119,635 acres 99 km off coastal Texas, with around 1.45GW of offshore wind potential to power 508,200 homes.
- Option L: 91,157 acres 85 km also off Texas, with over 1GW of capacity that could power 387,450 homes.
- Option N: 56,978 acres 132 km off the coast of Louisiana with at least 690MW to power around 242,000 homes.
Capacity estimates are based on BOEM's conservative estimate of 3MW per square kilometre, with commercial development expected to be higher.
BOEM will follow with a proposed lease sale notice followed by a 60-day comment period, with an action possible early next year.
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