Record bids reach $1.5bn flow in US' biggest-ever offshore wind auction as slow-burn lease areas catch light
Up-to-7GW New York Bight sees leasing prices soar as high as $410m for prime development acreage as landmark tender opens, and even smaller zones that had been ignored start to ramp as industry awaits final awards announcement
The US’ largest-ever offshore wind leasing tripled previous records, reaching $1.5bn in total as fewer bidders than expected competed fiercely for acreage in the New York Bight, and even smaller and poorly placed areas skyrocketed by 6pm close of Wednesday. The auction is set to resume on Thursday morning at 9am, with most lease areas remaining contested and with two or more bidders in the running.
The US government is auctioning off a vast 488,201 acres of prime ocean real estate in the New York Bight with up to 7GW of potential capacity in the biggest offshore wind energy leasing yet held in American waters.
Twenty-five bidders qualified for this record-setting tender, but only 14 showed up to bid, a number that reflects previous auctions that likewise saw fewer actual participants than had qualified.
Results as of round 21
The New York Bight's largest lease area, OCS-A-0539, encompassing 125,964 acres with at least 1.38GW of potential offshore wind power, has already reached $410m, smashing the previous record of $135m for a single area set in 2018 off Massachusetts. At $3,254/acre, it triples the previous record price of $1,050/acre. Five bidders remain in the contest for this prized lease.
Three other leases likewise bested the 2018 record, reaching $265m, 295m, and 285m, as even laggard zones that were either smaller or poorly located have since gained suitors that have driven up their prices.
The smallest, OCS-A-0544, located nearest to New York’s Long Island just next to Equinor-BP's Empire Wind development, had previously garnered little attention in earlier rounds, yet by the current round 17 has gained three suitors that have driven its price to $100m. At close of day, BOEM noted that this area had zero bidders in rounds 20 and 21.
Meanwhile, wallflower OCS-A-0542, not the smallest area at over 77,000 acres and 934MW of potential capacity but stranded on the backside of OCS-A-0541, had attracted four bidders, but by round 10 the price hadn't budged beyond the opening $8.4m price. Subsequently, bidding skyrocketed and the bid now stands at $180m.
The BOEM will declare a preliminary winner once only a single bidder remains, or if no bidder bids on the last round, it will be awarded to the winner of the previous round. At this point, only lease area 0544 has no bidder, and 0538 has a single bidder, with the other areas still contested, mostly with three bidders in the running.