BOEM Moves Forward with More U.S. Offshore Wind Auctions and Projects

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The U.S. continues to push forward for the development of its offshore wind energy industry with steps for the next lease auction and moving toward approval of another project while at the same time, efforts are being accelerated to identify more opportunities for offshore wind farms in Maryland and the Central Atlantic region.

The Department of the Interior’s Bureau of Ocean Energy Management released details for the next proposed offshore lease auction which is likely to proceed in 2024. They are starting a public comment period for a proposed auction that would offer two parcels in the Central Atlantic. The two areas include one approximately 26 nautical miles from the Delaware Bay that would serve Maryland and Delaware potentially. The second is 35 nautical miles from the mouth of the Chesapeake Bay to serve Virginia. 

BOEM however followed through with its earlier comments and withheld a third proposed site 23.5 nautical miles from Ocean City, Maryland. In July 2023, BOEM said the area needed more study and today they said it is excluded from the proposed upcoming auction due to the “significant cost and mitigation that would be required,” for the proposed lease area. They said however that consideration would continue for this third parcel to be part of an auction as soon as 2025.

In a separate announcement, they reported that the site known as B-1 was “at this time not viable.” However, in a partnership with the Departments of Defense, Commerce, National Oceanic and Atmospheric Administration (NOAA), Cost Guard, National Aeronautics and Space Administration (NASA), and Maryland’s governor and senators, the Department of Interior said they have agreed to work together to evaluate additional areas off Maryland. 

BOEM reports it has identified a similar size and wind energy generation capacity site off Maryland. The agencies and state will work jointly to complete the evaluation of the area. It could be part of a lease sale as early as 2025.

An environmental review was also completed for Ørsted’s proposed Sunrise Wind project that would be located south of Martha’s Vineyard and east of Montauk, New York. BOEM, however, is recommending that the project be reduced in size from the proposed 94 wind turbines to a maximum of 84 with the potential for 924 MW. The decision to scale back the project was based on the geotechnical feasibility of the project and to reduce the impact on habitat while meeting the needs of neighboring states. BOEM will make the revised plan available for comment and expects to make a decision on the project early next year.

BOEM’s actions, however, might be moot as Sunrise Wind is one of the projects analysts expect Ørsted to walk away from due to financial pressures. In October, New York turned down an application from Ørsted to reset the power purchase agreement for the project but opened the door for the project to be rebid in 2024.  It is unclear how the decision to lower the number of wind turbines would impact the project.

Ørsted CEO Americas David Hardy told Reuters in October, “Sunrise Wind’s viability and therefore ability to be constructed are extremely challenged without this adjustment.” 

BOEM highlights that it has approved six commercial-scale wind farms and has held four auctions. They are continuing to push forward toward the target of 30 MW of offshore wind energy generation by 2030. Despite the financial pressures that emerged in 2023, the U.S.’s first two large offshore wind farms are both ready to generate power while several others are moving forward with construction.

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