First West Coast Offshore Wind Lease Auction Raises Over $757 Million in High Bids

The first offshore wind lease auction on the U.S. West Coast has ended with high bids totaling $757.1 million, the U.S. Bureau of Ocean Energy Management (BOEM) announced Wednesday.

The lease sale, which kicked off Tuesday, offered five lease areas covering 373,268 total acres off of Morro Bay on the central coast and Humboldt County in northern California. Combined, the areas have the potential to produce over ?4.6 gigawatts? of offshore wind energy, equivalent to approximately 1.5 million homes.

The lease sale represents the third major offshore wind lease sale this year and the first ever for the Pacific region. It also is the first in the nation to support commercial-scale floating offshore wind.  Floating offshore wind farms have the potential to be located in deeper waters, where conditions are more favorable for energy production.

“The Biden-Harris administration believes that to address the climate crisis head on, we must unleash a new era of clean, reliable energy that serves every household in America. Today’s lease sale is further proof that industry momentum – including for floating offshore wind development – is undeniable,” said Secretary Deb Haaland. “A sustainable, clean energy future is within our grasp and the Interior Department is doing everything we can to ensure that American communities nationwide benefit.”

The sale is planned as part of the Biden Administration’s goal of deploying 30 gigawatts (GW) of offshore wind energy by 2030 and 15 GW of floating offshore wind energy by 2035. The latter target was announced in September along with a $50 million commitment from the Department of Energy to fund research and development into floating wind technology and demonstration projects, part of a goal to bring costs of floating wind down by 70% to $45 per megawatt-hour.

Lease Winners

The sale is now third of up to seven sales that the Biden Administration is planning to hold by 2025. In February, the New York Bight offshore wind lease sale attracted a record $4.37 billion in high bids, the highest amount ever raised in an energy lease auction—including oil and gas. The second, the Carolina Long Bay offshore wind sale held in May, received $315 million in winning bids and covered waters off North and South Carolina. More sales are being planned for waters off Oregon, the Central Atlantic, Gulf of Maine, and the Gulf of Mexico. All proceeds from the sales are directed to the U.S. Treasury.

“The innovative bidding credits in the California auction will result in tangible investments for the floating offshore wind workforce and supply chain in the United States, and benefits to Tribes, communities, and ocean users potentially affected by future offshore wind activities. This auction commits substantial investment to support economic growth from floating offshore wind energy development – including the jobs that come with it,” said ?BOEM Director Amanda Lefton. “These credits and additional lease stipulations demonstrate BOEM’s commitment to responsibly grow the offshore wind industry to achieve our offshore wind goals.”

This week’s California sale included a 20-percent credit for bidders committing to a monetary contribution for programs or initiatives that support workforce training programs for the floating offshore wind industry, the development of a U.S. domestic supply chain for the sector, or both. The credit will result in over $117 million in investments.

The auction also included 5% credits for bidders who committed to entering community benefit agreements (CBAs) with communities, stakeholder groups, or Tribal entities impacted by lease development.