Record-breaking New York Bight lease auction sends bids soaring

The recently concluded Bureau of Ocean Energy Management (BOEM) lease auction for six areas totaling more than 488,000 acres in the New York Bight sent offshore wind lease prices into the stratosphere – setting records as a result.

The marathon auction – which lasted 64 rounds over nearly three full days – culminated on Feb. 25 with winning bids from six companies totaling approximately $4.37 billion. According to the  US Department of the Interior, the results of the New York Bight lease auction were the highest-grossing competitive offshore energy lease sale in history, including oil and gas lease sales. By itself, OCS-A 539 – which, at 125,964 acres, was the largest parcel being auctioned, generated a staggering bid of $1.1 billion from an entity known as Bight Wind Holdings LLC. The other provisional winners are as follows:

• OCS-A 537 OW Ocean Winds East ($765 million)
• OCS-A 538 Attentive Energy LLC ($795 million)
• OCS-A 541 Atlantic Shores Offshore Wind Bight LLC ($780 million)
• OCS-A 542 Invenergy Wind Offshore LLC ($645 million)
• OCS-A 544 Mid-Atlantic Offshore Wind LLC ($285 million)

According to the DOI, the New York Bight offshore wind leases include stipulations designed to promote the development of a robust domestic US supply chain for offshore wind energy and enhance engagement with Tribes, the commercial fishing industry, other ocean users and underserved communities. The stipulations will also advance flexibility in transmission planning. Stipulations include incentives to source major components domestically – such as blades, turbines and foundations – and to enter into project labor agreements to ensure projects are union-built.

Shortly after the results were announced, Secretary of the Interior Deb Haaland said, “The offshore wind sale makes one thing clear: the enthusiasm for the clean energy economy is undeniable and it’s here to stay. The investments we are seeing will play an important role in delivering on the Biden-Harris administration’s commitment to tackle the climate crisis and create thousands of good-paying, union jobs across the nation.”

According to BOEM, before the leases are finalized, the Department of Justice and Federal Trade Commission will conduct an anti-competitiveness review of the auction, and the provisional winners will be required to pay the winning bids and provide financial assurance to BOEM.

As more US offshore wind leases are planned for this year, The Renewables Consulting Group can assist would-be bidders with market entry, mergers and acquisitions, analysis and other advisory scopes and services. To learn more, contact Doug Pfeister, managing director at (646) 431-8810.