Interior Department plans second offshore wind sale in Gulf of Mexico

(CN) — The Department of Interior’s Bureau of Ocean Energy Management published a notice of proposed sale Thursday for its second offshore wind energy auction in the Gulf of Mexico. With more than 410,000 acres offered for lease, the proposed sale area is significantly larger than the 301,746 acres offered by BOEM during the first Gulf of Mexico wind sale in 2023. 

Fully utilized, the bureau believes the area has the potential to provide power to more than 1.2 million homes. But the first sale proved to be unpopular, with just two of the 16 registered companies submitting bids, on just one of three lease areas. The winning bidder was RWE Offshore US Gulf LLC, which paid $5.6 million for 102,480 acres about 44 miles south of the Louisiana coastline. 

In a statement Wednesday, Interior Secretary Deb Haaland said the proposed sale is part of the Biden administration’s effort to build momentum for a clean energy economy. In the past three years, the Interior Department has approved the nation's first six commercial scale offshore wind projects and held four offshore wind lease auctions. The nation’s first offshore wind farm began generating electricity off the coast of New York in 2023, part of the administration’s goal of permitting 30 gigawatts of offshore wind energy capacity by 2030.

“We are taking action to jumpstart America’s offshore wind industry and using American innovation to deliver reliable, affordable power to homes and businesses, while also addressing the climate crisis," Haaland said.     

In its 2024 Factbook, the Business Council for Sustainable Energy noted the wind industry struggled in 2023, a year “marked by project cancellations and contract renegotiations as developers confronted high costs of capital, inflation, supply chain constraints and uncertainty over tax credit qualification.” However, the bureau did issue four project construction applications for offshore wind projects totaling 6.5 gigawatts of capacity, the highest number in a single year. 

According to a 2020 study by the National Renewable Energy Laboratory, the production of energy from offshore wind in the Gulf of Mexico was considered the most viable of potential renewable sources, although the costs of production in the Gulf are greater than along the East or West coasts. It also suggested turbines in the region would need to be re-engineered to withstand hurricanes and produce energy in the near absence of wind, while also requiring a greater degree of coordination to avoid interruptions to other offshore industries. The Gulf region also enjoys low costs of energy due to prolific oil and gas exploration, so demand for wind energy is less than in other areas of the country. 

With Thursday’s proposed sale, the bureau seeks feedback on various aspects of the proposed lease areas, including size, orientation, and location of the four lease areas and which areas, if any, should be prioritized for inclusion or exclusion from this lease sale. The bureau is also seeking comment on potential lease revisions to include the production of hydrogen or other energy products using wind turbine generators on the lease. 

While the date of the proposed auction has yet to be announced, the 60-day public comment period ends on May 20, 2024. If the bureau decides to proceed with the auction, the next step would be publication of a Final Sale Notice. 

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