Ocean bureau readies auction of Maryland offshore wind tracts

The federal Bureau of Ocean Energy Management said in a Final Sale Notice (FSN) to be published in the July 3 Federal Register that it is ready to auction two commercial wind energy leases on the Outer Continental Shelf (OCS) offshore of Maryland.

BOEM is offering Lease OCS-A 0489 (North Lease Area) and Lease OCS-A 0490 (South Lease Area) for sale using a multiple factor auction format. The two lease areas (LAs) together comprise the Maryland Wind Energy Area (WEA), which was described in the Call for Information and Nominations published on Feb. 3, 2012.

The two LAs are identical to those announced in the Proposed Sale Notice (PSN) for Commercial Leasing for Wind Power on the Outer Continental Shelf (OCS) Offshore Maryland, which was published on Dec. 18, 2013, in the Federal Register.

BOEM will hold a mock auction for the eligible bidders on Aug. 12. The actual auction will be held online and will begin at 8:30 a.m. Eastern Daylight Time (EDT) on Aug. 19.

Potential bidders should be aware of various items under consideration by BOEM relevant to or situated near the Maryland WEA.

For example, in March 2011, Atlantic Grid Holdings LLC submitted an unsolicited application for a right of way (ROW) grant. Following publication of a notice to determine competitive interest in the grant area and a 60-day public comment period, BOEM published its determination of no competitive interest in May 2012. In May 2013, Atlantic Grid Holdings submitted a supplement to its application. BOEM anticipates that the Maryland lease sale will occur prior to a decision regarding the granting of a ROW to Atlantic Grid Holdings, as a result of the required environmental compliance documentation that is still needed. BOEM does not foresee the activities under the ROW grant interfering with the lessee’s ability to develop the lease areas.

Also, potential bidders should note that portions of certain sub-blocks in both the North and South LAs may not be available for future development (i.e., installation of wind facilities) due to navigational safety concerns.

BOEM has determined that the following companies are legally, technically, and financially qualified to hold a commercial wind lease offshore Maryland, and are therefore eligible to participate in this lease sale as bidders: Apex Offshore Maryland LLC, Bluewater Wind Maryland LLC, Convalt Energy LLC, Dominion Wind Development LLC, EDF Renewable Development Inc., Energy Management Inc., Fishermen’s Energy LLC, Green Sail Energy LLC, IBERDROLA RENEWABLES Inc., Maryland Offshore Wind LLC, Orisol Energy US Inc., RES America Developments Inc., SCS Maryland Energy LLC, Sea Breeze Energy LLC, Seawind Renewable Energy Corp. LLC and US Wind Inc.

Officials hail this as a major step forward for offshore wind

Secretary of the Interior Sally Jewell, Maryland Gov. Martin O’Malley and Bureau of Ocean Energy Management Acting Director Walter Cruickshank on July 2 announced that this nearly 80,000 acres offshore of Maryland will be offered for auction.

“Maryland is a leading force for building a clean and sustainable energy future,” said Jewell. “Thanks to Governor O’Malley’s leadership and significant stakeholder involvement through BOEM’s Maryland Intergovernmental Renewable Energy Task Force, we have reached another milestone as we strengthen our nation’s foothold in the new energy frontier.”

To date, BOEM has awarded five commercial wind energy leases off the Atlantic coast: two non-competitive leases (Cape Wind in Nantucket Sound off Massachusetts and an area off Delaware) and three competitive leases (two offshore Massachusetts-Rhode Island and another offshore Virginia). BOEM is expected to hold additional competitive auctions for Wind Energy Areas offshore Massachusetts and New Jersey in the coming year.

According to analysis prepared by the U.S. Department of Energy’s National Renewable Energy Laboratory, if fully developed, the Maryland Wind Energy Area could support between 850 MW and 1,450 MW of commercial wind generation.

“To combat climate change, we must develop cleaner, renewable sources of energy – and today’s announcement is a tremendous step forward for the U.S. offshore wind industry,” said O’Malley. “As we continue our work to drive up renewable energy generation in Maryland by 20 percent by 2022, the O’Malley-Brown Administration is committed to continuing to work with our federal partners to do everything we can to meet this goal and create a stronger, more sustainable future for generations to come.”

Under procedures outlined in the Final Sale Notice, BOEM will consider monetary and nonmonetary factors in determining the winner. An example of a nonmonetary factor is a Power Purchase Agreement or a Maryland Public Service Commission-issued Offshore Renewable Energy Certificate held by the bidder. The nonmonetary phase of the auction will begin on Aug. 15, and the monetary phase on Aug. 19.

About Barry Cassell 20414 Articles
Barry Cassell is Chief Analyst for GenerationHub covering coal and emission controls issues, projects and policy. He has covered the coal and power generation industry for more than 24 years, beginning in November 2011 at GenerationHub and prior to that as editor of SNL Energy’s Coal Report. He was formerly with Coal Outlook for 15 years as the publication’s editor and contributing writer, and prior to that he was editor of Coal & Synfuels Technology and associate editor of The Energy Report. He has a bachelor’s degree from Central Michigan University.