New wire — The Biden administration launched the first ever auction of offshore wind development rights in the Gulf of Mexico on Tuesday, expanding its bet on the nascent clean energy industry to a major U.S. hub for oil and gas production.
The sale is a major milestone in President Joe Biden’s agenda to make offshore wind a cornerstone of his plan to fight fossil-fuel driven climate change.
The Interior Department is auctioning off a lease area of 102,480 acres (41,472 hectares) off the coast of Lake Charles, Louisiana, and two areas totaling nearly 200,000 acres offshore Galveston, Texas.
According to a BOEM document, fifteen companies are qualified to bid at the sale. They include offshore wind development arms of European energy companies Equinor, Shell, RWE and TotalEnergies, all of which are already developing U.S. offshore wind leases in other regions. Equinor and Shell also have oil and gas operations in the Gulf.
The areas up for sale have the potential to generate about 3.7 gigawatts of power and could supply nearly 1.3 million homes with clean energy, Interior has said.
Developers, however, are looking beyond the grid in the Gulf, eyeing the sale as a possible way to fuel a green hydrogen supply chain for the region’s vast industrial corridor.
The Gulf auction is not expected to attract anywhere near the billion of dollars of bids in an offshore wind lease sale off New York and New Jersey in February 2022.
Those states have passed laws that require utilities to buy power from offshore wind projects – mandates considered critical for a technology that is estimated to produce electricity at twice the cost of a natural gas plant.
Reporting by Nichola Groom Editing by Marguerita Choy and Nick Zieminski – Reuters
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