Offshore, Project Development, Wind Power

Texas Grants Lease for Gulf of Mexico Wind Project

Texas is now in a position to launch the first U.S. offshore wind project with its announcement of a lease agreement for a wind farm in the Gulf of Mexico. This is the second such lease granted by Texas for an offshore project and follows a similar announcement in October 2005.

The multi-million dollar agreement from the Texas Land Office’s “Texas wind rush” grants project developer Superior Renewable Energy (SRE) the rights to 39,900 acres of submerged lands in the Gulf of Mexico, just off the coast of Padre Island and south of Baffin Bay. SRE is an independent renewable energy company formed in 2002 to engage in the development of large-scale wind power generation projects. The company plans to build a 500 megawatt (MW) wind farm that will generate enough power to satisfy a small city, or about 125,000 homes. “This lease is the biggest in the country — what else would you expect from Texas? Anyone paying high energy costs understands the importance of what we’re doing here today,” said Jerry Patterson, Commissioner of the Texas General Land Office. The lease provides SRE a four-year period for research, after which the company will begin construction of enough turbines to produce a minimum of 250 MW of electricity. SRE plans to expand the offshore wind farm to 500 MW or more. Under the lease, SRE is allowed to assess Texas coastal winds, develop a production plan and construct the wind farm — all with its own money. If there’s one sticky point to this project it’s that there are concerns among numerous environmental groups over the area proposed for the wind farm as it is a route taken by migratory birds. The lease requires the company to engage an avian specialist to further research the topic. Every penny earned by the Land Office from this and every other lease is constitutionally dedicated to the Texas Permanent School Fund, which helps pay for public education in Texas. Traditionally, this fund has benefited from oil and gas revenue from state lands. The General Land Office expects Texas schools to earn anywhere from $34 million to more than $100 million from the lease, depending on how many megawatts are produced and the future price of electricity. The lease is structured to encourage early production of energy and will provide yet another revenue stream for public schools. Due to a Renewable Portfolio Standard, Texas is already second behind California in terms of overall total installed wind power capacity. “When completed, this will be the biggest offshore wind farm in U.S. history,” Patterson said. “It affirms the Lone Star State’s position as the home for offshore wind energy in the United States. Like I said in 2003, the great Texas wind rush is on.” See a related story at National Public Radio via the following link. Also, a related story on Renewable Energy Access regarding the first offshore wind project lease in Texas can be found at the second link below.