Dec 14, 2018

Offshore wind companies bid record amounts to develop U.S. waters

Photo: Paul Ellis/AFP via Getty Images

Wind energy companies bid record-shattering amounts Thursday for the rights to develop federal waters off the Massachusetts coast, offering the Interior Department a combined $285 million thus far for three tracts. And the auction isn't even over yet! It resumes today.

Why it matters: The robust bidding signals that offshore wind in the U.S., which has been way slower to develop than in the big European market, is poised for significant expansion.

What they're saying: Liz Burdock, executive director of the Business Network for Offshore Wind, tells me it's a clear sign of plans to move forward with major projects.

“These developers are obviously not going to put this amount of money into lease areas that they are just going to sit on.”
— Liz Burdock

By the numbers: The totals obliterate the previous high from last year.

  • Last December a single area offered off New York's coast drew a $42 million winning bid from Norwegian oil-and-gas giant Equinor, which is increasingly moving into renewables.
  • Now, the high bids thus far for the 3 areas off Massachusetts are $93 million, $91 million and $101 million.

The current amount of U.S. power from offshore wind is close to zero — there's only a single small project operating off Rhode Island.

  • But a number of projects are in the development pipeline off Atlantic states like New York, New Jersey, and Massachusetts, where Vineyard Wind is planning a major project 14 miles off the coast.

Several forces are driving the trend, including falling tech costs, state-based renewables policies (including a procurement mandate in Massachusetts), Interior Department backing, and interest from European energy giants with experience.

  • Danish energy giant Orsted in October announced the $510 million purchase of the U.S. company Deepwater Wind.
  • Several key bidders authorized to participate in the Massachusetts auction are the American arms of huge European players, such as Equinor and EDF.
  • Vineyard Wind is co-owned by Copenhagen Infrastructure Partners and Avangrid Renewables, part of the Spain-based energy giant Iberdrola Group.

The big picture: Burdock notes that the U.S. industry has evolved from the early days when small developers were trying to get projects going. She adds ...

“Now the developers are well-capitalized utilities and-or oil and gas companies that have the balance sheets and the expertise with which to deliver these projects.”

What's next: The International Energy Agency sees the U.S. adding 1.3–2.1 gigawatts of capacity by 2023 (and the agency is often knocked for being too conservative).

  • The consultancy Bloomberg New Energy Finance sees U.S. offshore wind growing to 10 GW by 2030, according to this Bloomberg news piece on the Massachusetts auction.

Go deeper

World coronavirus updates

Data: The Center for Systems Science and Engineering at Johns Hopkins; Map: Axios Visuals

Japan's economy minister outlined plans on Monday to end the nationwide state of emergency as the number of new novel coronavirus cases continues to decline to less than 50 a day, per Bloomberg. Japan has reported 16,550 cases and 820 deaths.

By the numbers: Over 5.4 million people have tested positive for the virus as of Monday, and more than 2.1 million have recovered. The U.S. has reported the most cases in the world (over 1.6 million from 13.7 million tests). The U.K. is reporting over 36,800 deaths from the coronavirus — the most fatalities outside the U.S.

Coronavirus dashboard

Illustration: Aïda Amer/Axios

  1. Global: Total confirmed cases as of midnight ET: 5,401,701 — Total deaths: 345,060 — Total recoveries — 2,149,407Map.
  2. U.S.: Total confirmed cases as of midnight ET: 1,643,238 — Total deaths: 97,720 — Total recoveries: 366,736 — Total tested: 14,163,195Map.
  3. World: White House announces travel restrictions on Brazil, coronavirus hotspot in Southern Hemisphere Over 100 coronavirus cases in Germany tied to single day of church services — Boris Johnson backs top aide amid reports that he broke U.K. lockdown while exhibiting symptoms.
  4. Public health: Officials are urging Americans to wear masks headed into Memorial Day weekend Report finds "little evidence" coronavirus under control in most statesHurricanes, wildfires, the flu could strain COVID-19 response
  5. Economy: White House economic adviser Kevin Hassett says it's possible the unemployment rate could still be in double digits by November's election — Public employees brace for layoffs.
  6. Federal government: Trump attacks a Columbia University study that suggests earlier lockdown could have saved 36,000 American lives.
  7. What should I do? Hydroxychloroquine questions answeredTraveling, asthma, dishes, disinfectants and being contagiousMasks, lending books and self-isolatingExercise, laundry, what counts as soap — Pets, moving and personal healthAnswers about the virus from Axios expertsWhat to know about social distancingHow to minimize your risk.
  8. Other resources: CDC on how to avoid the virus, what to do if you get it, the right mask to wear.

Subscribe to Mike Allen's Axios AM to follow our coronavirus coverage each morning from your inbox.

Updated 51 mins ago - Politics & Policy

U.S. coronavirus updates

Data: The Center for Systems Science and Engineering at Johns Hopkins; Map: Andrew Witherspoon/Axios. This graphic includes "probable deaths" that New York City began reporting on April 14.

President Trump doubled down on his push to reopen schools, tweeting late Sunday: "Schools in our country should be opened ASAP."

Zoom in: Trump pushed back on NIAD Director Anthony Fauci cautioning against the move earlier this month, calling his concerns "not an acceptable answer."