Government Market News StaffPlans to expand U.S. offshore wind energy production continue to progress despite recent project cancellations and delays caused by rising costs and supply-chain issues.
The United States will auction two federally owned sites off the coast of Virginia, Delaware and Maryland in 2024, the U.S. Department of the Interior’s Bureau of Ocean Energy Management (BOEM) announced this month.
The central Atlantic wind farms, which are expected to provide energy to 2.2 million homes, are part of a national effort to increase renewable energy production on public lands and waters.
The Virginia wind farm is 35 nautical miles from the mouth of the Chesapeake Bay and spans 176,505 acres. The other wind farm is 26 nautical miles from the Delaware Bay and stretches 101,443 acres.
Separately, New Jersey Gov. Phil Murphy last month ordered the New Jersey Board of Public Utilities (NJBPU) to launch its fourth solicitation for offshore wind early next year.
“Today’s announcement affirms New Jersey’s commitment to offshore wind,” NJBPU President Christine Guhl-Sadovy said. “Offshore wind is vital to our clean energy economy and our efforts to mitigate climate change, and we are resolute in our efforts to ensure New Jersey realizes its benefits.”
This spring, New Jersey released a third solicitation guidance for an offshore lease that would generate 1200-4000 megawatts. Applications closed in August, and a decision is expected early next year.
Also this month, Louisiana’s State Mineral and Energy Board approved the state’s first wind operating agreements. Diamond Offshore Wind La (DOW Wind) covers more than 6,000 acres off the coast of Terrebonne and Lafourche parishes, while Cajun Wind spans almost 60,000 acres off Cameron Parish.
Additionally, Delaware began formal negotiations last week with renewable energy company US Wind on two planned offshore wind projects – MarWin and Momentum Wind.
The announcements came just weeks after Orsted, the Danish company that planned to build two wind farms off the coast of New Jersey, called Ocean I and Ocean II, announced it is canceling those projects.
High inflation, rising interest rates, supply chain constraints and a vessel delay on Ocean Wind 1 caused the cancellation, the company said.
Working toward a goal
The federal government’s energy production goals include 30 gigawatts of offshore wind by 2030, 15 gigawatts of floating offshore wind energy by 2035 and permitting at least 25 gigawatts of onshore renewable energy by 2025.
As of May, the capacity of U.S. offshore wind energy projects under development or currently operated increased 15% from the previous year to 52,687 megawatts, according to the 2023 edition of the Department of Energy’s Offshore Wind Market Report.
One gigawatt of wind energy can supply 225,000 to 300,000 average U.S. homes with power annually, according to the Interior Department.
Since 2020, the BOEM has held four successful offshore wind lease auctions totaling $5.5 billion, including first-ever sales to entities with interests in the Pacific and the Gulf of Mexico.
On Oct. 31, the Department of the Interior (DOI) announced it had approved the massive 2600 megawatt Coastal Virginia Offshore Wind (CVOW) commercial project – its most ambitious project yet – and the fifth in a series.
Collectively, the CVOW – along with South Fork and Revolution Wind (Rhode Island) and Vineyard Wind 1 (Massachusetts) – are expected to produce 5 gigawatts of clean energy, enough to power 1.75 million homes.
The Interior Department is also exploring additional opportunities for offshore wind energy development in the Gulf of Maine and the Oregon coast.
Separately, the BOEM is preparing a draft environmental assessment that will evaluate the potential environmental impacts of the wind farms.
Strategic Partnerships, Inc. can provide information on contract opportunities, plus existing and future government funding. For more information, contact research@spartnerships.com.
