Companies pledged to spend at least $1.54 billion buying the rights to build wind farms off the coast of New York and New Jersey during a government auction Wednesday — more than tripling the previous record as renewable developers compete for the chance to sell carbon-free electricity to the Northeast U.S.
More than a dozen firms jockeyed over six leases spanning 488,201 acres (197,570 hectares) in the New York Bight, a shallow stretch of the Atlantic between Long Island and New Jersey with the potential to generate 5.6 gigawatts to 7 gigawatts of zero-emission power. That’s enough electricity to power about 2 million homes.
The auction, which is set to resume Thursday after an overnight recess, has already obliterated past records, driven by pent-up demand for limited territory to build offshore wind farms and a clamor of state-level commitments to buy the electricity they ultimately produce. New York has set a goal of 9 gigawatts of wind power by 2035 and New Jersey plans to have 7.5 gigawatts by that point.
“The offshore wind industry has truly arrived,” Doug O’Malley, research and policy center director for Environment New Jersey, said in an emailed statement. “Offshore wind is a gold mine of untapped clean energy” that represents the best way to meet state and federal climate commitments.
Bids mounted rapidly after starting at $48.8 million Wednesday morning, with the average per-acre offer reaching $3,144 after 21 rounds — more than three times the 2018 record of $1,043, according to an Interior Department summary of ongoing auction results. Interest has concentrated on the largest lease for sale: a 125,964-acre parcel 32 miles (52 kilometers) from the New Jersey shore now set to fetch at least $410 million.
Bidding is anonymous during the auction, though companies that previously registered as possible participants include European heavyweights such as Avangrid Renewables and Equinor ASA as well as U.S. firms including Invenergy and Arevia Power. Fourteen companies were initially vying for leases, and by day’s end, one had dropped out.
During the U.S. government’s last offshore wind sale nearly four years ago, 11 companies competed for three tracts off the Massachusetts coast, with winning bids topping $405 million after 32 rounds.(Updates with high bid total, individual bidding summary, quote, from first paragraph.)© 2022 Bloomberg L.P.