The US Department of Interior completed its highly anticipated New York Bight lease auction on Friday, the first offshore wind auction to take place in nearly four years. The roughly 480,000-acre leases are located off the New York and New Jersey coasts. They were divided up into six lease areas awarded to Atlantic Shores Offshore Wind Bight (EDF and Shell), Attentive Energy (EnBW and Total), Bight Wind Holdings (RWE and National Grid), Invenergy Wind Offshore, Mid-Atlantic Offshore Wind (Copenhagen Infrastructure Partners), and OW Ocean Winds East (EDP Renewables and ENGIE).
The New York Bight is expected to produce up to 7 GW of renewable energy — enough to power millions of homes — and puts the nation on a path to reach the Biden Administration’s goal of 30 GW of offshore wind energy by 2030. Although this was the first lease sale under President Biden, the administration committed to holding additional lease sales in the Carolinas, California, Gulf of Mexico, Central Atlantic, Oregon, and the Gulf of Maine by 2025 — the first steps toward the goal of deploying 110 GW by 2050. The auction also furthers New Jersey and New York’s efforts to procure 7.5 GW and 9 GW respectively and continue building one of the largest combined markets in the world.
The Growing Wind Energy Economy
A recent report indicates that the United States’ growing offshore wind energy industry presents a US$109 billion revenue opportunity for businesses in the wind energy supply chain over the next decade.
“This week’s offshore wind sale makes one thing clear: the enthusiasm for the clean energy economy is undeniable and it’s here to stay,” said Secretary Deb Haaland. “The investments we are seeing today will play an important role in delivering on the Biden-Harris administration’s commitment to tackle the climate crisis and create thousands of good-paying, union jobs across the nation.”
Before the leases are finalized, the Department of Justice and Federal Trade Commission will conduct an anti-competitiveness review of the auction, and the provisional winners will be required to pay the winning bids and provide financial assurance to Interior’s Bureau of Ocean Energy Management (BOEM).
The New York Bight offshore wind leases include innovative stipulations designed to promote the development of a robust domestic US supply chain for offshore wind energy and enhance engagement with tribes, the commercial fishing industry, other ocean users, and underserved communities. The stipulations will also advance flexibility in transmission planning. Stipulations include incentives to source major components domestically — such as blades, turbines, and foundations — and to enter into project labor agreements to ensure projects are union-built.
“We must have a robust and resilient domestic offshore wind supply chain to deliver good-paying, union jobs and the economic benefits to residents in the region,” said BOEM Director Amanda Lefton. “Because we understand the value of meaningful community engagement, we are requiring lessees to report their engagement activities to BOEM, specifically noting how they’re incorporating any feedback into their future plans.”
On January 12, Secretary Haaland, New Jersey Governor Phil Murphy, and New York Governor Kathy Hochul announced a shared vision for developing a robust offshore wind energy domestic supply chain that will deliver benefits to residents of New York and New Jersey and the surrounding region, including underserved communities. This collaboration will serve as a model for future engagement and establish the United States as a major player in the global offshore wind energy market.
To advance the Interior Department’s environmental justice and economic empowerment goals, lessees will be required to identify and make efforts to engage with tribes, underserved communities, and other ocean users who could be affected by offshore wind energy development. The department will hold companies accountable for improving their engagement, communication, and transparency with these communities.
These additions are intended to promote offshore wind energy development in a way that coexists with other ocean uses and protects the ocean environment, while also securing the nation’s energy future for generations to come.
BOEM initially asked for information and nominations of commercial interest on 1.7 million acres in the New York Bight. Based on BOEM’s review of scientific data and extensive input from the commercial fishing industry, tribes, partnering agencies, key stakeholders, and the public, BOEM reduced the acreage offered for lease by 72% to avoid conflicts with ocean users and minimize environmental impacts. BOEM will continue to engage with the public, ocean users, and key stakeholders as the process unfolds.
The Biden Administration has already made significant progress toward creating a pipeline of projects. It has approved and celebrated the groundbreaking of the nation’s first two commercial-scale offshore wind projects in federal waters: the 800-MW Vineyard Wind project and the 130-MW South Fork Wind project. BOEM expects to review at least 16 plans to construct and operate commercial offshore wind energy facilities by 2025, which would represent more than 22 GW of clean energy for the nation.
In fall 2021, Secretary Haaland announced a new leasing path forward, which identified up to seven potential lease sales by 2025, including the New York Bight and offshore the Carolinas and California later this year, to be followed by lease sales for the Central Atlantic, Gulf of Maine, the Gulf of Mexico, and offshore Oregon.
“The New York Bight auction concluded today after days of intense bidding that reflect the great advancement of the US offshore wind industry and the pent-up demand for new lease areas,” saod Liz Burdock, CEO of the Business Network for Offshore Wind. “The New York Bight benefited from clear political support, an emerging, yet robust, local supply chain, and a years-long preparation window which should allow the winning bidders to quickly begin the permitting process and put steel in the water by the end of the decade. Gains here today will go a long way to achieve the Biden Administration’s goal of 30 GW by 2030 and will play a critical role in the formation of a domestic supply chain. We look forward to the administration conducting planned auctions in the Atlantic, Pacific, and Gulf of Mexico over the next few years, which will build off of this week’s momentum. Friday’s lease auction follows a year that saw US$2.2 billion in new offshore wind investments, announcements for nine new manufacturing facilities, and dramatic growth in the domestic supply chain. It is good to see offshore wind in demand right now, however, we must continue building a sustainable industry through investments in supply chain port infrastructure, ship building and transmission systems, and ensuring our systems are aligned toward that goal. The lease sale notably included provisions directly encouraging supply chain investment for the first time, demonstrating that the federal government understands how important localizing a supply chain is to the long-term success of the industry and the country’s energy security.”