United States

United States

Half of Massachusetts block left unleased

UNITED STATES: The Bureau of Ocean Management (BOEM) has announced RES Americas and OffshoreMW as winners of the Massachusetts wind lease auction, but over half the area available failed to attract bids.

Only zones 500 (orange) and 501 (cream) attracted bids
Only zones 500 (orange) and 501 (cream) attracted bids

BOEM divided the lease area into four areas, ranging from 585 square kilometres to 1,004 square kilometres. It is the US agency's fourth commercial auction for offshore wind energy developers.

RES Americas will pay $281,285 for a 759 square kilometre parcel. OffshoreMW, a part of Germany's WindMW, bid $166,886 for a second 675 square kilometre zone. 

Deeper waters and the lack of state incentives could have contributed to the significantly lower prices received for wind energy lease areas off the coast of Massachusetts compared to previous auctions, BOEM Director Abby Ross Hopper said. Winning bids in past auctions ranged as high as $8.7 million.

Two other parcels, which were further from shore, went unclaimed in Thursday's sale. There were 12 companies qualified to participate in the Massachusetts auction, but only RES and OffshoreMW lodged bids. The auction went to two rounds.

Hopper was "happy" with the results of the auction and admitted starting prices were set lower than previous auctions as the developers faced more challenges with this site. 

Water depths in the two areas that were leased range from 36 to 63 metres, which makes development more expensive and challenging than the Rhode Island, Virginia and Maryland auctions.

Massachusetts has yet to pass legislation to help incent the sector the way other states have, Hooper added. "That obviously has value and can impact the prices companies are willing to pay for the leases," she said.

BOEM now needs to discuss with local authorities what to do with the remaining unleased zones. 

Hopper did not think that recent setbacks experienced by Cape Wind may have scared off bidders concerned about being able to find buyers for the electricity.

"I think the recent activity at Cape wind should not be read as any sort of indicator of what happened in this auction," she said.

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