US wind and solar power giant Invenergy landed its first-ever offshore acreage in the country’s record-obliterating New York Bight auction last week, leading an all-American consortium to bag one of six leases awarded in a European developer-dominated tender that pulled almost
$4.4bn in bids.
Invenergy, together with partners EnergyRe, Blackstone Infrastructure, CDPQ, FirstLight Power and Ullico Infrastructure Fund, won one of the ‘less expensive’ lots in the auction, paying $645m for the 84,000-acre lease 0542.
“For more than twenty years, Invenergy has leveraged our deep technical expertise to lead the renewable energy transition in the United States and around the world,” said Michael Polsky, Invenergy founder and CEO.
“The US offshore market is the next frontier in the clean energy revolution, and [through it] we... have the opportunity to increase American competitiveness in the global offshore market.”
Located on the far-side of lease 0541 facing open ocean, Invenergy’s lease went without a single bid until well into the afternoon of the first day (Wednesday), but eventually
caught fire late in the second day of bidding.
A Chicago-based clean-energy developer, Invenergy has a 29GW-plus land-based wind, solar and energy storage portfolio backed some $43bn in financing, including several gigascale onshore wind farms in the US and some smaller projects in Scotland. The developer only recently dipped its toe into offshore wind, including a tie-up
with floating technology specialist BW Offshore to target development of up-to-5.4GW in Scotland’s ScotWind leasing round.
The New York Bight auction prices smashed the previous record set in
2018 off of Massachusetts, which reached $505m for three lease areas all larger than 127,000 acres, coming in at $135m per area, around $1,062/acre.
Among other acreage winners, Shell-EDF joint venture Atlantic Shores – which is already
developing its eponymous 1.5GW project in New Jersey – paid considerably more for the smaller but westward-facing 79,00-acre lease 0541, stumping up a winning bid of $780m.
“This New York Bight lease in combination with our existing portfolio of offshore energy projects solidifies Atlantic Shores’ position as a driving force to establish this new industry and deliver clean, renewable power while protecting our natural resources,” said Joris Veldhoven, Commercial and Finance Director at Atlantic Shores Offshore Wind.
“It also provides significant momentum for the
Atlantic Shores domestic supply chain strategy and qualified workforce we are investing in,” he said.
Danish investment firm Copenhagen Infrastructure Partners (CIP), meanwhile, won lease 0544 for $285m, both the lowest overall price and the lowest per acre at $6,619. The acreage, despite being located only 32km off the coast of load centre Long Island, New York, has unresolved potential shipping lane conflicts risk as well as maritime space-use risk resulting from Norwegian Equinor’s adjacent
Empire Wind 1&2 projects, which appeared to make it less attractive to bidders.
Partner with renewables major Avangrid in the nation’s first offshore wind project to reach construction, the
800MW Vineyard Wind 1, CIP, which has 3.5GW of developments in its pipeline, sees synergies in this new addition to its Massachusetts pipeline.
“The auction of lease areas in the New York Bight represented a strong investment opportunity given the anticipated growth of the offshore wind industry in the US in the coming years,” said Christian Skakkebæk, Senior Partner and Cofounder of CIP, noting that the company has 3.5GW of US offshore acreage.
“By adding OCS-A 0544, our combined portfolio on the East Coast gives us the ability to find synergies across the entire project portfolio.”
Also taking away US Atlantic development acreage were German developer RWE-led Bight Wind, EDP Renewables-Engie joint venture Ocean Winds, and
Total-led Attentive Energy.
The New York Bight leasing, expected to lead to construction of over 5.6GW of plant in the US Atlantic, smashed previous records set in 2018, when bids topped out at $135m for over 127,000 acres, around $1,062/acre off Massachusetts.
Final bids in the auction held by the Bureau of Ocean Energy Management averaged $8,732/acre, meaning the Invenergy consortium got a relative bargain at $7,680/acre, as compared to the $10,696/acre paid by Ocean Winds for the smaller 0537 lease area.
Aaron Barr, global head of onshore wind energy for analytics firm
Wood Mackenzie, told
Recharge that record prices “are a function of the large lease areas and the rapidly maturing US offshore industry”.
“These particular lease areas hold significant value due to the proximity to load centers of New York and New Jersey, which will have an unrelenting demand for more and cleaner electricity,” he said.
The tender greatly furthers the Biden administration's goal of having
30GW of turbines turning by 2030, as well as the New York and New Jersey state mandates of 7.5GW and 9GW, respectively, by 2035.
Fourteen of a possible 25 qualified bidders participated in the auction, with several global and US offshore wind leaders walking away empty-handed, including Dane Orsted, Iberdrola-owned Avangrid, and Norwegian Equinor.
“The New York Bight seabed leasing auction confirms the growing opportunity for offshore wind energy in the US... and we’ll continue to evaluate our options to add seabed to our portfolio,” an Orsted spokesperson told Recharge.
The
long-anticipated leasing in the New York Bight sets off what the federal government hopes will be a dynamic year in the US offshore wind sector and anticipates further auctions of up to
1.6GW in the Wilmington East wind energy area (WEA) off of the Carolinas, as well as tenders in the
Humboldt and Morro Bay WEA off California totalling as much as 4GW, and possibly even in the Gulf of Mexico.
