The recent offshore wind lease sale in the Gulf of Mexico, under the Biden administration’s initiative, did not meet expectations, as revealed by the Bureau of Ocean Energy Management (BOEM) data.
On Tuesday, the Department of the Interior (DOI) listed three areas for potential buyers, cumulatively spanning about 300,000 acres. Only one place saw any bidding activity despite indicating several companies were interested. Specifically, the two plots near Galveston, Texas, didn’t garner bids. In contrast, the area near Lake Charles, Louisiana, received three offers from two businesses.
This lukewarm response is a blow to the administration’s aspirations for offshore wind energy, which aims to produce sufficient power for up to 10 million American homes by the end of this decade. The areas available in the recent sale alone could cover about 10% of the Biden administration’s goal for 2030. However, contributions from the Gulf region seem more uncertain, Reuters reports.
A conservation organization discreetly informed Senate Democrats that there might be a need to halt the development of offshore wind farms to safeguard a threatened species of whales.
A BOEM representative remarked, “This lease sale is a pivotal step towards our objective of achieving 30 gigawatts of offshore wind energy by 2030.” They emphasized the Gulf’s potential, noting its existing energy infrastructure, skilled workforce, and expertise. The representative expressed optimism about future sales, underscoring the region’s capability to transition to renewable energy.
However, some challenges make the Gulf’s offshore wind energy less attractive than other places. Apart from hurricane threats and unfavorable underwater soil conditions, electricity rates in the southeast are typically lower than in the Northeast, America’s primary offshore wind hub. This price difference suggests that costly offshore wind energy might struggle to compete with other power sources.
RWE Offshore US Gulf secured the Lake Charles plot with a $5.6 million bid. Yet, its potential output might light up fewer than 450,000 households, considerably below the administration’s original estimations if all zones had been procured for development.
Interestingly, Reuters added that RWE Offshore’s successful bid was the smallest for a federal offshore wind lease since the Obama administration.