Six companies bid record $4.3 billion for N.J. and N.Y. offshore wind energy leases
Under the first bid of its kind for the administration, the federal government is leasing 480,000 acres in the New York Bight, which, despite the name, falls mostly off the coast of New Jersey.
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A U.S. Department of Interior auction this week brought in $4.37 billion in winning bids for what the Biden administration calls the “nation’s highest-grossing competitive offshore energy lease sale in history.” It’s designed to produce 30 gigawatts of wind energy by 2030 off the coast of New Jersey and New York.
“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,” Interior Secretary Deb Haaland said in a statement. “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.”
Under the first bid of its kind for the administration, the federal government is leasing 480,000 acres in the New York Bight, which, despite the name, falls mostly off the coast of New Jersey, spanning from Long Island, N.Y., to Cape May. President Joe Biden sees offshore wind as a way to not only address climate change, but create jobs. The administration points to a recent report suggesting the U.S. offshore wind energy industry means $109 billion for businesses in the supply chain over the next decade.
Ed Potosnak, executive director of the New Jersey League of Conservation Voters, said he was “thrilled to see the Biden administration take steps to responsibly develop offshore wind projects that can provide reliable and affordable clean energy, which can power our homes, protect our shore communities from rising sea levels, create good-paying union jobs, and will address the air pollution that creates health disparities in low income and communities of color.”
The auction opened Wednesday and bids quickly escalated over the next two days until the provisional winners were announced Friday afternoon. The highest bid at $1.1 billion was for the largest of the six lease areas. Bight Wind Holdings LLC bid on a lease area covering 125,964 acres roughly 32 nautical miles off the coast of Long Beach Island and carved out to produce enough energy to provide power for more than 323,000 homes.
Overall, the six companies placing bids are expected to install enough wind turbines to power nearly two million homes.
“This auction will help propel us forward when it comes to renewable energy, which will help prevent unnecessary dirty fossil fuel plants and pipelines from being built,” said Anjuli Ramos-Busot, director of the New Jersey Chapter of the Sierra Club.
The winning bids were announced just a month after New Jersey and New York pledged to work together to foster offshore wind.
New Jersey already has three projects in the pipeline from previous leases totaling 3.7 gigawatts, enough to power about 1.5 million homes, with the goal of 7.5 gigawatts by 2035. The state is also developing a 200-acre wind port in Salem County to foster the nascent offshore wind industry with marshaling operations — staging, assembling, and shipping — as well as manufacturing of giant turbines. A separate manufacturing area is under construction by EEW at the Paulsboro Marine Terminal upriver in Gloucester County to build 400-foot-long, 2,500-ton steel monopoles that serve as foundations for the turbines.
New Jersey hopes the facilities will capture key parts of the supply chain for offshore wind, now dominated by Europe. The supply chain is valued at $109 billion over the next decade for the U.S.
New York has plans for 9 gigawatts of offshore wind to be powered by five projects by 2035.
The two states have pledged to collaborate and establish “a durable domestic supply chain that will facilitate the responsible development of the offshore wind industry and deliver benefits to residents of New York and New Jersey, including underserved, disadvantaged, and overburdened communities,” according to a report, A Shared Vision on the Development of an Offshore Wind Supply Chain.
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However, offshore wind has not been universally greeted as welcome news. Some commercial and recreational groups have opposed the turbines, saying they could impede fishing and encroach on habitat. Some homeowners are concerned about the aesthetics of having the skyscraper-tall turbines parked off the coast, even if they are miles away in federal waters.
In 2018, the Bureau of Ocean Energy Management initially sought leases on 1.7 million acres in the bight. However, after meeting with various interest groups and the public, it agreed to reduce the size by 72% to avoid conflicts and reduce environmental impacts.
Before the leases are finalized, the Department of Justice and Federal Trade Commission will conduct an anticompetitiveness review of the auction, according to the Department of the Interior. Stipulations on the bids are designed to promote the development of a domestic U.S. supply chain and engagement with the fishing industry, other ocean users and underserved communities.