Wednesday, June 12, 2024

Federal government plans first Gulf of Mexico wind power lease sale for August

by BIZ Magazine

(The Center Square) — The U.S. Department of Interior will hold its first offshore wind energy lease sale in the Gulf of Mexico in August, with one of three areas up for bid south of Lake Charles.

The Bureau of Ocean Energy Management will publish the Final Sale Notice in the Federal Register on Friday for three lease areas that include 102,480 acres offshore of Lake Charles and two offshore from Galveston, Texas – 102,480 acres and the other 96,786 acres. The areas are scheduled to be auctioned on Aug. 29.

Taken together, the lease areas are expected to generate about 3.7 gigawatts of wind energy, equating to enough power for 1.3 million homes, according to an Interior Department statement Thursday.

“The Gulf of Mexico is poised to play a key role in our nation’s transition to a clean energy future,” BOEM Director Elizabeth Klein said in a news release. “Today’s announcement follows years of engagement with government agencies, states, ocean users, and stakeholders in the Gulf of Mexico region. We look forward to continued collaboration in the years to come.”

The leases play into the Biden administration’s goals of deploying 30 gigawatts of offshore wind energy by 2030 and reaching a carbon-free electricity sector by 2035. Louisiana has its own wind power generation goal of 5 gigawatts by 2035.

The lease sale announced Thursday follows the third commercial-scale offshore wind energy project approved by BOEM for an area 13 miles southeast of Atlantic City, New Jersey earlier this month. Others are ongoing in the Atlantic Ocean offshore from Massachusetts, and New York and Rhode Island.

Legislation reintroduced by Louisiana Republican U.S. Sen. Bill Cassidy in February would ensure states get a cut of offshore wind lease revenues beyond state waters, which are currently required to be deposited in the U.S. Treasury. The Reinvesting in Shoreline Economies and Ecosystems Act would send 37.5% of offshore wind revenue to states adjacent to where wind farms are developed, while also eliminating state revenue sharing caps in the Gulf of Mexico Energy Security Act and Land and Water Conservation Fund.

Louisiana constitutionally dedicates revenues from offshore energy production to pay for conservation, restoration, and environmental projects to preserve and restore its coastline.

The Louisiana Department of Natural Resources is reviewing at least five proposed near-shore wind energy projects in state waters within three nautical miles of shore. They include areas near Cameron, St. Mary, and Vermillion parishes.

The push toward wind energy, however, faces an array of major problems, from supply chain issues to surging costs to permitting delays, industry experts said at a conference in Boston last week.

The concerns follow reports earlier this year that showed meeting the government wind energy goals would require billions in spending on transmission infrastructure and extensive cooperation between government and grid operators.

One report, by the National Renewable Energy Laboratory, calls for a $22.4 billion buildup of the supply chain for wind energy to reduce reliance on components from Europe, while the other from the Brattle Group consulting firm cites the need for significant transmission upgrades and better planning for connections with the current system.

“Any planning steps taken today are unlikely to yield significant new transmission infrastructure until the early 2030s,” according to the Brattle Group report.

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