US Gulf of Maine Offshore Wind Auction draws only $22 Million in Bids

A Biden administration

Auction

The U.S. Bureau of Ocean Energy Management announced on Tuesday that the offshore wind development rights offered in the Gulf of Maine attracted bids of $21.9 million for the first half of eight areas.

Avangrid, a developer of offshore wind power, and Invenergy both walked away from the auction with two leases each. The 14 companies qualified to bid were Avangrid and Invenergy.

BOEM estimates that once developed, these lease areas could power over 2.3 million homes.

The sale was seen as a test of the industry's appetite for new investments after a year marked by high-profile failures. The sale was a chance for the industry to show interest in future floating wind turbines - a technology that is needed in deep water areas.

This was the final auction before U.S. president Joe Biden (a Democrat) leaves office in January.

Former President Donald Trump has promised to stop offshore wind project if he wins the presidential election on Nov. 5, and defeats Democratic Vice-President Kamala Harris.

Biden has made offshore winds a cornerstone in his plan to decarbonize electricity grids by 2035. Costs are on the rise, and there have been supply chain issues and construction accidents that have slowed down development. This has cast doubts on the administration's goal to install 30 gigawatts in offshore wind by this decade.

Avangrid has won two leases near the coast of Massachusetts where it is also developing offshore wind projects. Invenergy was awarded a lease on the coasts of Massachusetts and Maine.

In general, the U.S. Northeast region is a market that offshore wind developers find attractive because many states have adopted laws that require procurement of this resource in order to meet climate-change goals. Maine, for example, has set a goal of installing 3 GW offshore wind by the year 2040. Massachusetts, with its target of 5.6GW by 2027, is the leader in offshore winds.

Two offshore wind auctions in the Gulf of Mexico, and Oregon this year have been canceled due to industry malaise. These regions do not have offshore wind mandates. (Reporting and editing by Nichola Choy; Marguerita Groom)

(source: Reuters)