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Statoil wins US wind lease sale off New York

Written by  Friday, 16 December 2016 14:35

The US government’s Atlantic Wind Lease Sale 6 for 79,350 acres offshore New York was held this week, with Norway’s Statoil being declared the provisional winner.  

Atlantic Wind Lease Sale 6 map, from Statoil.

The New York lease area consists of five full Outer Continental Shelf blocks and 143 sub-blocks. It starts approximately 11.5 nm from Jones Beach, NY at its westernmost point, extending approximately 24 nm southeast at its longest portion.

Secretary of the Interior (DOI) Sally Jewell, and Bureau of Ocean Energy Management (BOEM) Director Abigail Ross Hopper announced the completion of the nation’s sixth competitive lease sale for renewable energy in federal waters today (16 December).

The provisional winner of the lease sale is Statoil Wind US, which bid US$42,469,725 for lease area OCS-A 0512, according to BOEM and the DOI.

The lease area comprises an area that could potentially accommodate more than 1 GW of offshore wind, with a phased development expected to start with 400-600 MW, Statoil said.

In addition, Avangrid Renewables, DONG Energy Wind Power US, Innogy US Renewable Projects, New York State Energy Research and Development Authority, and wpd offshore Alpha LLC also participated. 

“This auction underscores the growing market demand for renewable energy among our coastal communities,” said Secretary Jewell. “It not only marks another milestone for the US offshore wind energy program, but also demonstrates how our collaborative efforts with state, local and private sector partners can advance a clean energy future in the United States.  I’m proud of what the Interior Department has accomplished over the past eight years to build a strong foundation to harness the incredible potential of offshore wind.”

With Statoil being the provisional winner, the Norwegian giant said it will now have the opportunity to explore the potential development of an offshore wind farm to provide New York City and Long Island with a significant, long-term source of renewable electricity.

“We are excited to have submitted the most competitive bid in a highly attractive project, Statoil’s first offshore wind lease in the United States. We now look forward to working with New York’s state agencies and contribute to New York meeting its future energy needs by applying our offshore experience and engineering expertise,” Irene Rummelhoff, Statoil executive VPfor New Energy Solutions said.

Statoil will next conduct studies to better understand the seabed conditions, the grid connection options and wind resources involved in the lease site. 

“We will work closely with the New York State Energy Research and Development Authority (NYSERDA) on these studies and throughout the permitting process, and in connection with power offtake options,” Rummelhoff said. “The US is a key emerging market for offshore wind – both bottom-fixed and floating – with significant potential along both the east and west coasts.”

The Obama Administration established a renewable energy program at the DOI, including the nation’s first program for offshore wind leasing and permitting.  

Over the past eight years, BOEM has fostered offshore renewable energy development through a collaborative state-federal process to identify wind energy areas and hold competitive lease sales. To date, BOEM has awarded 11 commercial wind leases, including nine through its competitive lease sale process. These lease sales have generated more than $16 million in winning bids for more than 1 million acres in federal waters.

“We are extremely pleased by the results of this lease sale,” said Hopper. “We have seen robust competitive interest for this auction, as evidenced by 33 rounds of bidding – the most we have seen for any of our lease sales to date. BOEM will continue to work with the members of out New York Intergovernmental Renewable Energy Task Force and the public on any future wind energy project proposed for this lease area.”

Before the lease is executed, the Department of Justice and Federal Trade Commission will conduct an anti-competitiveness review of the auction, and the provisional winner will be required to pay the winning bid and provide financial assurance to BOEM. The lease will have a preliminary term of one year, during which the lessee may submit a site assessment plan (SAP) to BOEM for approval. The SAP will describe the facilities, for example the meteorological towers or buoys, that the lessee plans to install or deploy for the assessment of the wind resources and ocean conditions of its commercial lease area, the DOI said.

Following approval of a SAP, the lessee will then have four and a half years to submit a construction and operations plan (COP) to BOEM for approval. This plan will provide a detailed proposal for the construction and operation of a wind energy project within the lease area. 

Once BOEM receives a COP, it will conduct an environmental review of the proposed project and reasonable alternatives. Public input will be an important part of BOEM’s review process. If BOEM approves the COP, the lessee will then have a term of 25 years to construct and operate the project.

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