US to hold 12 offshore wind lease sales; New York halts three projects after turbine change

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US to hold 12 offshore wind lease sales by 2028

The U.S. plans to hold 12 offshore wind lease sales by 2028, the Department of Interior announced on April 24.

The schedule calls for four lease sales in 2024 (Central Atlantic, Gulf of Maine, Gulf of Mexico, and Oregon), one each in 2025 and 2026 (Gulf of Mexico and Central Atlantic, respectively), two in 2027 (Gulf of Mexico and New York Bight) and four in 2028 (California, a U.S. Territory, Gulf of Maine, and Hawaii).

The roadmap, which will be updated every five years, will give investors more long-term certainty “to continue building on the tremendous offshore wind supply chain and manufacturing investments that we’ve already seen,” Secretary of Interior Deb Haaland said in a statement.

The Interior Department also issued new rules to streamline permitting requirements for offshore wind development. The rules eliminate requirements for meteorological buoys, improve survey and auction regulations and allow incremental funding of decommissioning accounts over the life of a facility. Together, the new rules would cut industry costs by $1.9 billion over the next two decades, it said.

The Biden administration aims to install 30 GW of offshore wind by 2030, a hugely ambitious task given recent market challenges.

    Installed offshore wind capacity by country

                                  (Click image to enlarge)

Source: U.S. Department of Energy's Offshore wind market report, 2023 edition (August 2023).

Since 2021, the Biden administration has held four offshore wind auctions, two in the Northeast, one in California and one in the Gulf and has established Wind Energy Areas in Oregon, the Gulf of Maine and the Central Atlantic. It has also approved the nation's first eight commercial-scale offshore wind projects, with a combined capacity of over 10 GW.

Two projects, Vineyard Wind 1 in Massachusetts (Avangrid and Copenhagen Infrastructure Partners) and South Fork (Orsted and Eversource) in New York started delivering power earlier this year.

New York shelves three offshore wind projects

New York state has decided not to sign offtake agreements with three planned offshore wind projects with a total capacity of 4 GW after turbine supplier GE Vernova decided to switch to a smaller turbine.

The decision refers to the 1.4 GW Attentive Energy One (Total and Corio Generation), 1.3 GW Community Offshore Wind (RWE and National Grid) and 1.3 GW Excelsior Wind (Vineyard Offshore) projects that were all awarded provisional contracts in a competitive auction in October 2023.

                            US offshore wind projects in Mid-Atlantic

                                                              (Click image to enlarge)

Note: Excelsior Wind lies within Vineyard Mid-Atlantic lease area.

Source: U.S. Department of Energy's Offshore wind market report, 2023 edition (August 2023).

GE Vernova had agreed to supply giant 18 MW Haliade-X turbines to the projects but later decided to switch to a 15.5/16.5 MW platform.

The New York State Energy Research and Development Authority (NYSERDA) decided not to sign the offtake agreements because GE Vernova’s decision “caused material changes to projects,” NYSERDA said on April 19.

Days later NYSERDA announced plans for two offshore wind solicitations that will take place this summer and in 2025. The first solicitation will seek to secure at least 2.6 GW of offshore wind energy.

The three projects impacted by the turbine switch have “indicated their continued interest in the New York market” and are eligible to participate in future solicitations, a NYSERDA spokesperson told Reuters Events.

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The Oceantic industry group said NYSERDA's decision on the projects was “disappointing” but predicted New York will take “bold action” to meet its target of building 9 GW of offshore wind energy by 2035.

Denmark launches largest ever offshore wind tender

Denmark has launched its largest offshore wind tender to date, offering concessions for six sites for up to 10 GW of capacity, the energy and climate ministry said.

Investors will pay a commission to the state over 30 years for the right to build the wind farms. The projects will receive no subsidies but the state would own a 20% stake in each of the successful projects.

"Projects on this scale can make a big green difference, for the climate and for our safety. Not just for Denmark, but for the whole of Europe,” climate and energy minister Lars Aagaard said in a statement.

The government has identified four offshore wind areas, North Sea 1, which could host up to 3 GW, Hesselo and Kattegat in the east (approximately 1 GW each) and Kriegers Flak II (1 GW).

Denmark aims to secure investments for at least 6 GW but developers could potentially seek to build up to 10 GW, more than enough to cover the country’s total power consumption. Some of the additional power could be exported or used to produce hydrogen, the ministry said.

               Installed wind capacity in Europe by country - end of 2023

                                                                (Click image to enlarge)

Source: WindEurope's Wind energy in Europe report (February 2024).

Industry group WindEurope warned the design of the lease sale could deter potential investors.

“Uncapped negative bidding will be used to award the sites. This imposes additional costs on wind farm developers and may lead to less wind energy being built,” the group said in a statement.

The cost of building 1 GW of offshore wind, which is enough to power roughly one million European homes, is around 16 billion Danish crowns ($2.3 billion), according to the energy ministry.

Denmark currently hosts 2.7 GW of offshore wind capacity and Germany's RWE is building the 1 GW Thor offshore wind farm in the North Sea, which is scheduled for completion in 2027.

Scotland approves Europe's largest floating wind project

Scotland has granted planning approval for Europe’s first commercial-scale floating wind farm.

Green Volt, a 50/50 joint venture between Flotation Energy and Vargronn will consist of 35 floating wind turbines that will provide up to 560 MW of clean energy.

Slated to start operations in 2029, Green Volt will supply power to oil and gas platforms in the North Sea, allowing participating facilities to move away from diesel and gas generators, and the remainder will be injected into the UK grid.

Green Volt is the first project to be approved under Scotland’s Innovation and Targeted Oil & Gas (Intog) program, which aims to slash emissions from oil and gas platforms.

Scotland is home to the world’s first floating wind farm, Equinor’s 30 MW Hywind Scotland facility, which started operations in 2017.

Reuters Events