The largest-ever U.S. sale of offshore wind development rights - for areas off the coasts of New York and New Jersey - attracted a record $1.5 billion in bids on Wednesday, supporting President Joe Biden's plan to create a new domestic industry.
The auction, which will continue on Thursday, is the first offshore wind lease sale under Biden, who has made expansion of offshore wind a cornerstone of his plans to tackle global warming and decarbonize the U.S. electricity grid by 2035, while creating tens of thousands of jobs.
After 21 rounds of bidding, combined live bids for the six leases stood at nearly $1.54 billion, according to updates posted on the U.S. Bureau of Ocean Energy Management's (BOEM) website.
That easily topped the U.S. offshore wind auction record of $405 million set in 2018. It was also far more than recent oil and gas auctions in U.S. federal waters. A sale of drilling rights in the Gulf of Mexico late last year, for instance, attracted $191.7 million in high bids.
BOEM said 14 companies took part in the auction. The website did not identify the companies competing for the leases, but approved bidders included entities controlled by Equinor ASA, Avangrid Inc, BP Plc, and Eletricite de France SA among others, according to government documents published last month.
By the end of the day, five of the six leases offered had each garnered bids well above the $135.1 million record set for a single U.S. offshore wind lease in 2018.
The highest was a bid of $410 million for a lease 32 miles (52 km) off the coast of New Jersey. The government had identified the 114-acre (46-hectare) area - the largest offered in the sale - as being capable of producing power for more than 485,000 homes.
The intense interest in the auction marks a major step forward for offshore wind power in the United States, which has lagged European nations in developing the technology. Currently, the United States has just two small offshore wind facilities, off the coasts of Rhode Island and Virginia, along with two additional commercial-scale projects recently approved for development.
BOEM is offering 488,201 acres in shallow waters between New York's Long Island and New Jersey, an area known as the New York Bight.
The area is 22% smaller than initially proposed last summer due to concerns about the impact of developments on commercial fishing and military interests.
'ENOUGH WIND TO POWER MILLIONS OF HOMES'
The energy generated from the newly offered areas could one day power nearly 2 million homes, the administration has said.
Last year, the Biden administration set a goal of installing 30 gigawatts (GW) of offshore wind by 2030 along the nation's coastlines, enough to power 10 million homes. Much of the current development is happening in waters off Northeastern states.
New York and New Jersey have set targets of building more than 16 GW of offshore wind by 2035, and Wednesday's lease areas - which lie between 20 and 69 nautical miles off the coast, according to BOEM - could deliver more than a third of that capacity.
"That's enough wind to power millions of homes," Ed Potosnak, executive director of the New Jersey League of Conservation Voters, said in an interview. "That's a big deal in a state with about nine million people."
Not everyone supports offshore wind development. The Biden administration's ambitions have stoked concerns among commercial fishermen and coastal communities about harm to their livelihoods and property values.
In January, a group of New Jersey residents sued BOEM over its leasing plans for the New York Bight. The group, from the summer colony of Long Beach Island, is concerned about the aesthetic impacts of the turbines and potentially lost tourism.
Greg Cudnik, owner of a fishing charter boat business on Long Beach Island, worries about what thousands of wind turbines will do to the ocean habitat.
"For all this that's taking place and all this that is put in jeopardy, to me, I don't see the net benefit," Cudnik said.
(Reporting by Nichola Groom in Los Angeles and Christine Kiernan in Ship Bottom, New Jersey; Editing by Bill Berkrot, Diane Craft and Richard Pullin)