Statoil said Dec. 16 that it has been declared the provisional winner of the U.S. government’s wind lease sale of 79,350 acres offshore New York.
Statoil 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. Statoil said it submitted a winning bid of $42,469,725 during the online offshore wind auction concluded Dec. 16 by the U.S. Department of the Interior’s Bureau of Ocean Energy Management (BOEM).
“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 contributing to New York meeting its future energy needs by applying our offshore experience and engineering expertise,” said Irene Rummelhoff, Statoil´s executive vice president for New Energy Solutions.
The lease 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. The New York Wind Energy Area is located 14-30 miles offshore, spans 79,350 acres and covers water depths between 65 and 131 feet. Statoil said it 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,” said Rummelhoff.
The State of New York is expecting that offshore wind will be a significant part of the renewable energy generation needed to meet its Clean Energy Standard in 2030.
“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. As today’s announcement shows, Statoil is well positioned to take part in what could be a significant build out of offshore wind in New York and other states over the next decade. This effort is in line with the company’s strategy to gradually complement our oil and gas portfolio with viable renewable energy and other low-carbon solutions,” said Rummelhoff.
In Europe, Statoil is developing an offshore wind portfolio. Statoil currently holds a 40% share in the Sheringham Shoal wind farm in the United Kingdom, which has been in production since 2012. The Dudgeon offshore wind farm, also located offshore Norfolk in the UK – and the world’s first floating offshore wind farm, Hywind Scotland – will come into production in 2017. Earlier this year, Statoil acquired 50% of the Arkona offshore wind farm in Germany, which will come into production in 2019.
Statoil is an integrated, technology-based international energy company primarily focused on upstream oil and gas operations. Statoil’s Energy Ventures Fund, launched in February 2016, is one of the world’s largest clean technology venture capital funds, dedicated to the successful advancement of viable renewable energy projects.
Secretary of the Interior Sally Jewell and BOEM Director Abigail Ross Hopper on Dec. 16 announced the completion of the nation’s sixth competitive lease sale for renewable energy in federal waters. They said the provisional winner is Statoil Wind US LLC, which bid $42,469,725 for lease area OCS-A 0512. Avangrid Renewables, LLC, DONG Energy Wind Power (U.S.) Inc., Innogy US Renewable Projects LLC, the New York State Energy Research and Development Authority, and wpd offshore Alpha LLC also participated in the lease sale.
“This auction underscores the growing market demand for renewable energy among our coastal communities,” said Jewell. “It not only marks another milestone for the U.S. 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.”
To date, BOEM noted that it has awarded eleven 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 one million acres in federal waters.
“We are extremely pleased by the results of this lease sale,” said BOEM’s 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.”
The New York Wind Energy Area starts approximately 11.5 nautical miles from Jones Beach, N.Y. From its western edge, the area extends approximately 24 nm southeast at its longest portion. The lease area consists of five full Outer Continental Shelf blocks and 143 sub-blocks.
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 (e.g., meteorological towers or buoys) a lessee plans to install or deploy for the assessment of the wind resources and ocean conditions of its commercial lease area.
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. If BOEM approves the COP, the lessee will then have a term of 25 years to construct and operate the project.