Election Jitters, Industry Headwinds Undermine Biden’s Final Offshore Wind Auction
By Nichola Groom Reuters October 29, 2024
Oct 29 (Reuters) – A U.S. auction of offshore wind development rights in the Gulf of Maine on Tuesday drew bids for only half of the eight offered leases, for a total of just $21.9 million in high bids, in the latest sign of deep industry malaise.
The sale was a stark display of the lack of industry appetite for new investment after a year of high-profile setbacks that include canceled projects, two shelved lease sales in Oregon and the Gulf of Mexico and a construction accident at the nation’s first major offshore wind project.
It also demonstrated a reluctance to bet big money on projects that will require floating wind turbines, an emerging technology required in very deep waters like those of the Gulf of Maine.
After just one round of bidding, four of eight offered leases sold to developers Avangrid and Invenergy, the U.S. Bureau of Ocean Energy Management said. They were among 14 companies that had been qualified to bid at the sale.
Gulf of Maine Offshore Wind Auction is Test for Beleaguered Industry
The results were a far cry from the $4.4 billion the Biden administration received at its first offshore wind auction held in 2022 for areas off New York and New Jersey.
“I was not expecting a repeat of the New York auction, but I’m surprised that this lasted only one round,” Stephen Maldonado, a North American power sector analyst with energy research firm Wood Mackenzie, said at an offshore wind conference in Atlantic City, New Jersey. “I’m also curious how the timing of the election influenced the thinking of the bidders.”
Former President Donald Trump, the Republican nominee in next week’s presidential election, has vowed to stop offshore wind projects if he defeats Democratic Vice President Kamala Harris in the Nov. 5 election.
The auction was the last before President Joe Biden, a Democrat, leaves office in January.
Biden has made offshore wind a cornerstone of his plan to decarbonize the electricity grid by 2035. But soaring costs and supply chain challenges have slowed development and cast doubt on his administration’s target to install 30 gigawatts of offshore wind this decade.
Avangrid secured two leases for a combined $11.1 million off the coast of Massachusetts, near where it has other leases. Avangrid is owned by Spain’s Iberdrola, which is developing floating wind projects in Europe.
“Securing these lease areas provides a unique opportunity to advance our growing business at a significant value,” Avangrid Chief Executive Pedro Azagra said in a statement.
Invenergy, which is based in Chicago, won a lease off the coast of Massachusetts and another off the coast of Maine. In a statement, the company said its participation in the sale demonstrated its commitment to the U.S. offshore wind industry.
Once developed, the lease areas have the potential to power more than 2.3 million homes, according to BOEM.
https://gcaptain.com/election-jitters-industry-headwinds-undermine-bidens-final-offshore-wind-auction/