The first-ever US offshore wind auction in the Gulf of Mexico took place today, but it was a bit of a washout with only one bid. The Bureau of Ocean Energy Management (BOEM) auctioned three lease areas off Texas and Louisiana, which have the potential to generate around 3.7 gigawatts (GW) of clean power for almost 1.3 million households. However, only one lease area received a single bid.
Germany’s RWE, one of the world’s largest offshore wind developers, won the rights to the Lake Charles, Louisiana, offshore wind lease area with a winning bid of $5.6 million. The Lake Charles lease area has the potential to generate 1.24 GW of offshore wind energy capacity and power nearly 435,400 homes with renewable energy. RWE’s project is expected to be operational by the mid-2030s, pending permitting timelines.
Sam Eaton, CEO of RWE Offshore Wind Holdings, stated that RWE bid in the auction to enter the Gulf’s offshore wind industry and help shape the nascent market. He also highlighted the region’s potential to bolster its skilled energy workforce and supply chain, unlocking a new economic engine. The state of Louisiana has set a goal to install 5 GW of offshore wind by 2035 and already has existing coastal port and supply chain infrastructure.
However, none of the 15 companies qualified to bid in the auction offered on the Galveston I and Galveston II lease areas off Texas. The Southeast has low power prices, and Texas lacks state policies supporting offshore wind development. Some lawmakers in Texas are even hostile towards offshore wind projects.
The lack of bids in Texas highlights the importance of state support for offshore wind development. In contrast, several planned offshore wind farms in the Northeast are facing challenges due to rising cost inflation. Liz Burdock, president and CEO of the Business Network for Offshore Wind, emphasized the role of state public policy in offshore wind market development.
Despite the limited success of the auction, offshore wind is expected to see massive growth in the US until 2032, according to a report. The industry remains committed to offshore wind in the Gulf and supporting the formation of a robust supply chain to build a new American energy industry.
Photo and map: RWE
Why did none of the eligible companies make offers for the Galveston I and Galveston II lease areas off the coast of Texas during the auction
The eagerly anticipated first-ever US offshore wind auction in the Gulf of Mexico took place today but resulted in disappointingly low bids. The Bureau of Ocean Energy Management (BOEM) auctioned off three lease areas off the coast of Texas and Louisiana, which have the potential to generate approximately 3.7 gigawatts (GW) of clean power, enough to supply nearly 1.3 million households. However, only one of the lease areas received a single bid.
The winning bid came from Germany’s RWE, a global leader in offshore wind development. RWE secured the rights to the Lake Charles lease area in Louisiana with a bid of $5.6 million. This lease area has the potential to generate 1.24 GW of offshore wind energy, providing renewable power to around 435,400 homes. RWE plans to have the project operational by the mid-2030s, pending necessary permits.
Sam Eaton, CEO of RWE Offshore Wind Holdings, emphasized that RWE bid in the auction to enter the offshore wind industry in the Gulf and contribute to shaping this emerging market. He also highlighted the region’s potential to strengthen its skilled energy workforce and supply chain, thereby unlocking a new economic sector. Louisiana has set a goal of installing 5 GW of offshore wind by 2035 and already possesses existing coastal port and supply chain infrastructure.
In contrast, none of the 15 companies eligible to bid in the auction made any offers for the Galveston I and Galveston II lease areas off the coast of Texas. This lack of interest further underscores the importance of state support for offshore wind development. Texas has lower power prices in its Southeast region, and there is a lack of state policies backing offshore wind projects. Some lawmakers in Texas even express hostility towards such initiatives.
This disparity in bids highlights the vital role that state public policy plays in driving offshore wind market development. Meanwhile, several planned offshore wind farms in the Northeast face challenges due to rising costs. Liz Burdock, president and CEO of the Business Network for Offshore Wind, emphasized the necessity of state support for the successful growth of the offshore wind sector.
Although the auction did not yield desired results, the offshore wind industry in the US is still expected to undergo substantial growth until 2032, according to a report. Stakeholders remain dedicated to offshore wind in the Gulf and continue to support the establishment of a strong supply chain that will help build a thriving American clean energy industry.
Photo and map: RWE
