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US Gulf of Maine offshore wind auction poses test for beleaguered industry

investing.com 29/10/2024 - 10:14 AM

Offshore Wind Development Rights Auction

By Nichola Groom

(Reuters) – President Joe Biden's administration on Tuesday will kick off a sale of offshore wind development rights for eight areas off the coasts of northern New England, testing the industry's appetite for new investment after a year of setbacks.

The auction of nearly 1 million acres (404,680 hectares) in the Gulf of Maine is the last planned before Biden, a Democrat, leaves office in January. Former President Donald Trump, the Republican candidate in next week's presidential election, has vowed to stop offshore wind projects if he defeats Democratic Vice President Kamala Harris in the Nov. 5 election.

Biden has made offshore wind a cornerstone of his plan to decarbonize the electricity grid by 2035. However, soaring costs, supply chain challenges, and a construction accident have slowed development, raising doubts about his administration's target to install 30 gigawatts of offshore wind this decade.

The leasing areas in the Gulf of Maine—off the coasts of Massachusetts, New Hampshire, and Maine—hold the potential to power over 4.5 million homes, according to the U.S. Bureau of Ocean Energy Management.

The U.S. Northeast is a lucrative market for offshore wind developers as many states have enacted laws mandating resource procurement to meet climate goals. For instance, Maine aims to install 3 GW of offshore wind by 2040, while Massachusetts targets 5.6 GW by 2027.

This year's industry malaise has stalled two offshore wind auctions in the Gulf of Mexico and Oregon, regions lacking offshore wind mandates.

Development in the Gulf of Maine could significantly boost the use of floating wind turbines, an emerging technology crucial for the area's deep waters. The U.S. hopes to establish 15 GW of floating wind capacity along its coasts by 2035 in places like California, Oregon, and Maine.

A small project to demonstrate this technology is currently being developed off the coast of Maine.

Companies such as Avangrid (NYSE:AGR), Equinor, TotalEnergies (EPA:TTEF), Repsol (OTC:REPYY), and Invenergy are among the 14 qualified developers bidding in the auction, according to a BOEM sale notice.

The auction will occur online beginning at 9:00 local time (1300 GMT), with updates available on BOEM's website.




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