Environment

Wind farm leases in Gulf of Mexico snubbed by market

September 2, 2023September 2, 2023

By David Pendered

Sept. 2 – The proposed wind farms on three sites in the Gulf of Mexico failed to attract much interest from bidders on Aug. 29, with only one of three lease areas receiving a bid.

No bids were received on two sites totaling 199,266 acres off the coast of Galveston, Texas. One site off Lake Charles, Louisiana received an acceptable bid of $5.6 million for 102,480 acres from a German-based entity.

Sites in the Gulf of Mexico for the first wind turbine farms were put on the auction block Aug. 29. No bids were tendered for sites off Texas. (Credit: BOEM)

The Biden administration sought to put a positive spin on the auction despite the lack of interest in what had been viewed as a competitive prospect of adding wind turbines to the gulf’s wide assortment of oil and gas rigs.

“Today’s lease sale represents an important milestone for the Gulf of Mexico region – and for our nation – to transition to a clean energy future,” Bureau of Ocean Energy Management Director Elizabeth Klein said in a statement. “The Lake Charles Lease Area will have the potential to generate enough electricity to power about 435,400 homes and create hundreds of jobs.”

The administration has made the development of offshore wind energy a pillar of its green infrastructure program. The goal is to deploy 30 gigawatts of offshore wind by 2030, while protecting biodiversity and promoting the creation of more than 44,000-well-paid jobs, according to a March 29,2021 statement from the White House.

At 44 miles off the coast of Lake Charles, Louisiana the planned wind farm should be invisible from the shoreline. (Credit: David Pendered, Gulf of Mexico)

The winning vendor, RWE Offshore Wind GmbH, portrayed the lease as the latest addition to its growing portfolio in the nation’s growing offshore sector. CEO Sven Utermöhlen said in an Aug. 29 statement:

“With today’s success in the Gulf of Mexico, RWE continues to build its position in the U.S. offshore wind industry. In 2022 we entered the U.S. offshore market and quickly expanded from coast-to-coast. Entering a new region in the Gulf is an exciting milestone to further deploy over 20 years of expertise across the value chain and deliver a new energy resource into the region. We look forward to shaping this new market together with our stakeholders to activate the full potential of offshore wind for the region.”

BOEM has posted an overview and history of the project on its website, Gulf of Mexico Activities.

State support of wind energy projects may be a factor in the lack of interest in the Texas leases.

RWE cited Louisiana’s supportive policies in its statement regarding the Lake Charles lease:

“Under Governor John Bel Edwards’ Climate Action Plan Louisiana has set a goal to achieve 5 GW of offshore wind capacity by 2035. RWE has made early investments into jumpstarting the offshore wind industry in the region, including a collaboration with Greater New Orleans, Inc. to accelerate the engagement of Louisiana’s supply chain to identify companies with transferable capabilities for offshore wind.”

Texas is sending a message different from that of Louisiana.

Texas is the nation’s largest producer of wind energy, yet the Republican-controlled legislature sought to tamp down on renewables in the session that ended in May. The vehicle was Senate Bill 624, which was not passed but sent a chilling message about the state’s appetite for more facilities to produce renewable energy.

A full report on SB 624 was published by The Texas Tribune. It is available at no charge.

Wind energy also is generating controversy in the Northeast. Hundreds of wind turbines are planned for the region. Clean Ocean Action is among the organizations calling for greater scrutiny of the planned wind farms before the turbines are built. COA has been working nearly 40 years, on behalf of commercial, recreational and other interests, to improve water quality off the New York/New Jersey Bight. COA outlined its purpose in a July 3 letter to BOEM related to a proposed offshore wind turbine project being led by Shell New Energies and a subsidiary of EDF Renewables North America:

“To be clear from the outset, COA supports responsible and reasonable offshore wind energy development, including a comprehensive, independent pilot project to determine the impacts of an offshore wind project from preconstruction, construction, operation, management, and decommissioning, as well as the associated onshore infrastructure support.
“However, this new, uncertain industry requires additional investigation of areas with a focus on comprehensive, inclusive assessments of all offshore and onshore wind energy life-cycle impacts.”