New Projects, Wind

Deepwater Wind wins U.S. offshore wind power project site auction

Dominion Virginia Power offshore wind lease auction Virginia Beach Deepwater Wind New England

Deepwater Wind New England LLC was selected as the provisional winner of two offshore wind energy site leases in federal waters off the coasts of Rhode Island and Massachusetts, bidding $3.8 million for the sites. The auction was the first-ever competitive lease sale for renewable energy in federal waters in the U.S.

Deepwater Wind plans to use the 164,750 acres granted in the leases to develop the Deepwater Wind Energy Center, a utility-scale wind farm of up to 200 turbines with a regional transmission system linking Long Island, N.Y to southeastern New England.

According to Deepwater, the project will have a capacity of up to 1,000 MW, with construction possibly beginning as early as 2017 and commercial operation beginning in 2018. Most turbines will be located 20 to 25 miles from the nearest landfall, and no turbine will be located closer than roughly 13 miles from land.

Deepwater Wind will pay annual rent payments of around $500,000 beginning this year until a wind farm is operational on the site, at which time the company will pay the federal government an annual royalty fee based on the value of the power produced by the project.

According to the U.S. Department of the Interior, the auction was the result of a “coordinated strategic plan to accelerate the development of offshore wind resources.” The department has also approved 46 wind, solar and geothermal utility-scale projects on thermal land since 2009, which could provide more than 12,700 MW of power capacity when built.

Three companies participated in the auction, with Deepwater Wind outbidding Sea Breeze Energy LLC and US Wind Inc. The U.S. Attorney General, in consultation with the Federal Trade commission, will have 30 days to complete an antitrust review of the auction, after which the Bureau of Ocean Energy Management will send Deepwater Wind unsigned copies of the lease forms. Each lease will have a preliminary term of six months in which to submit a Site Assessment Plan to BOEM for approval, and 4.5 years to submit a Construction and Operations Plan after the Site Assessment Plan is approved.

The next competitive lease sale for offshore wind power sites, which will auction nearly 112,800 acres offshore Virginia, will be on Sept. 4, and the BOEM is expected to announce additional auctions for areas offshore Massachusetts, Maryland and New Jersey later this year.

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