U.S. sets out Gulf of Mexico offshore wind lease areas; EU carbon prices hit 100 euros/tonne

The wind power news you need to know.

U.S. proposes three offshore wind areas in Gulf of Mexico

U.S. federal authorities have set out three lease areas for offshore wind development off the coast of Louisiana and Texas in the first auction in the Gulf of Mexico.

In a proposed sale notice (PSN), the Bureau of Ocean Energy Management identified a 102,480-acre area off the coast of Lake Charles, Louisiana, and two areas off the coast of Galveston, Texas spanning 102,480 acres and 96,786 acres.

Interested parties will have 60 days to comment on the proposed areas before a final sale notice is published, BOEM said on February 22.

President Biden has set a target of 30 GW of offshore wind by 2030 and activity is spreading from the East Coast to the south and west.

The Biden administration plans to hold up to four additional offshore wind lease sales by 2025 and aims to complete environmental reviews of at least 16 offshore wind projects by 2025, representing over 20 GW of capacity.

To accelerate deployment, the Interior Department has streamlined survey requirements and pledged to issue five-year leasing roadmaps that will provide developers and suppliers with a clearer pipeline of projects.

Last year, the state of Louisiana set a target of 5 GW of offshore wind capacity by 2035 in its first ever Climate Action Plan to reach net zero by 2050. Louisiana's industrial sector is responsible for two thirds of the state's carbon emissions and rising renewable energy capacity will help companies switch from fossil fuel energy supplies to clean electricity and green hydrogen, the office of Governor Jon Bel Edwards said. Louisiana will implement a Renewable and Clean Portfolio Standard (RCPS) that requires utilities to supply at least 80% from renewables by 2035, it said.

Smooth allocation of leases and permits could see the first wind farms operational from around 2028, Walter Musial, Lead - Offshore Wind Research Platform at The National Renewable Energy Laboratory (NREL), told Reuters Events in March 2022.

The Gulf of Mexico's unique wind and sea conditions will require adaptations to turbine design and operation but developers can leverage existing oil and gas infrastructure and global offshore wind savings, experts said.

“Indications are that cost may be approaching competitiveness without subsidies by 2030,” a BOEM spokesperson said.

Equinor partners with EnBW to build offshore wind in Germany

Norwegian oil group Equinor has partnered with German utility EnBW to jointly develop offshore wind farms in Germany, the companies said on February 17.

The announcement comes as Germany's energy regulator Bundesnetzagentur prepares to hold offshore wind lease auctions in June and August for a combined capacity of 8.8 GW.

Germany is Europe's second largest offshore wind market behind the UK and is accelerating renewable energy deployment following its withdrawal from Russian gas supplies.

Germany currently operates around 8 GW of offshore wind and aims to install 30 GW of offshore wind and supply 80% of power from renewable energy by 2030.

                             Installed wind capacity in Europe by country

                                                                    (Click image to enlarge)

Source: WindEurope, February 2023

To achieve its renewable energy target, Germany also aims to accelerate annual onshore wind installations five-fold to 12 GW by around 2025 and quadruple solar capacity to 200 GW by 2030.

EU carbon prices surpass 100 euros for first time

The price of carbon permits in the European Union's Emissions Trading Scheme (ETS) hit 100 euros per tonne ($106.57/mt) for the first time on February 21, sending more positive price signals for renewable energy deployment.

The European Union Allowances (EUAs) are used by manufacturers, power companies and airlines to pay for each tonne of carbon dioxide they emit.

EUA prices were lingering around 25 euros until they started climbing in 2021. Reforms to the EU carbon market last year created bullish sentiment that has been heightened in recent weeks as companies approach the annual April deadline to cover last year's emissions. In addition, power sector demand for EUAs increased in 2022 as some generators fired up coal-fired plants to make up for dwindling gas supplies from Russia following its invasion of Ukraine.

Reuters Events