Md. offshore wind auction rakes in $8.7M

Source: Elizabeth Harball, E&E reporter • Posted: Thursday, August 21, 2014

The Interior Department’s third auction of acreage for offshore wind development was dubbed a resounding success by the federal agency, drawing a final bid of $8,701,098 for two lease areas totaling nearly 80,000 acres near Ocean City, Md.

This result far outstrips the winning bids during the Bureau of Ocean Energy Management’s first two offshore wind energy area auctions; the first, for ocean area near Rhode Island and Massachusetts, resulted in a final bid of $3.8 million, and the second, for ocean area near Virginia, garnered $1.6 million.

“We’re pleased to see such strong commercial interest in today’s auction,” BOEM acting Director Walter Cruickshank said in a statement.

After 19 rounds of online bidding, the provisional winner of both lease areas is US Wind Inc., a subsidiary of Renexia SpA, an Italian company. According to Renexia’s website, the company has interests in a wide range of renewable energy projects, including solar and geothermal power, and has installed 300 megawatts of onshore wind in Italy.

Two other companies participated in the auction, Green Sail Energy LLC and SCS Maryland Energy LLC.

BOEM renewable energy program manager Maureen Bornholdt said in a teleconference after the auction that Maryland and its Intergovernmental Renewable Energy Task Force were a “tremendous asset” to the process. Last year, the state enacted the Maryland Offshore Wind Energy Act, which includes significant incentives for offshore wind development in the state, including a renewable energy credit program obliging state energy suppliers to source a set percentage of electricity from offshore wind.

While Bornholdt said her agency will review the auction process to determine what made it a success, she added, “I will say this: In part, it was that partnership with the state of Maryland and the Intergovernmental Task Force to help us bring these two lease areas to bear, and the work, of course … that Maryland has done to create a good environment for renewable energy off its state.”

According to the Interior Department, an offshore wind project in the auctioned area could support between 850 and 1,450 MW of power, potentially powering 300,000 homes.

Following an antitrust review by the attorney general and the Federal Trade Commission over the next 30 days, BOEM will send the lease to US Wind Inc., which will then have 10 days to sign and pay the balance of the final bid, Interior said in a release.

During the following year, US Wind will need to submit a site assessment plan to BOEM, and if that is approved, the company will then have an additional 4½ years to send in a more detailed construction and operations plan.

If all goes well, US Wind Inc. will hold America’s sixth commercial wind energy lease with an operations term of 25 years. No offshore wind projects have yet been constructed in U.S. waters, but Deepwater Wind Inc.’s Block Island Wind Project near Rhode Island and the Cape Wind project planned for Massachusetts’ Nantucket Sound will likely be the first such developments to put energy onto the American grid.