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U.S. Offers Offshore Wind Power Leases on Three Atlantic States

U.S. Offers Offshore Wind Power Leases on Three Atlantic States

The Obama administration will offer leases next year for wind-energy development off the coasts of Massachusetts, Rhode Island and Virginia, the Interior Department said.

The agency, which oversees energy development in federal waters more than 3 miles from shore, set aside 277,550 acres divided into two wind-energy areas on the outer continental shelf, according to a statement today. The two areas are estimated to support more than 4,000 megawatts of wind power, enough for 1.4 million homes, Interior said.

The auctions will be the first competitive sales for wind energy on the outer continental shelf, where no projects are yet operating, according to the agency. The sales differ from leases previously awarded to Cape Wind Associates LLC and NRG Energy Inc. for projects in Massachusetts and Delaware because those areas were deemed non-competitive by Interior, enabling a single developer to negotiate the leases in each case.

Developers that have shown interest in leases in the two areas include European energy companies Iberdrola SA and Electricity de France SA, U.S. utility holding company Dominion Resources Inc., closely held developers Deepwater Wind LLC and Apex Wind Energy Inc., as well as Energy Management Inc., Cape Wind’s parent, according to Interior’s website.

The Virginia area will be auctioned as a single lease encompassing 112,800 acres about 23.5 nautical miles off the southern coast of the state and is expected to support a project of as large as 2,000 megawatts, according to the statement. The annual rent for the space will be $338,397, according to lease documents.

Sale Timing

The second area will be auctioned as two leases covering about 164,750 acres about 9.2 nautical miles south of the Rhode Island coastline, Interior said. A north and south zone will encompass 97,500 acres and 67,250 acres and require yearly rent payments of $292,494 and $201,756, respectively, according to lease documents. Both are expected to support projects of as much as 1,000 megawatts, Interior said.

The sale will be conducted next year after a 60-day comment period that will end in February, according to the statement.

Copyright 2012 Bloomberg

Lead image: Offshore wind via Shutterstock

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