Opening rounds of the first California offshore wind auction attracted $402.1 million from wind developers, at average prices just over $1,000 an acre – far removed from the frenetic bidding for New York Bight leases in February 2022.
The Bureau of Offshore Energy Management called a recess in bidding at 5:20 p.m. Eastern time, after 20 rounds that ended with a bid of $62.7 million for one of the northernmost Humboldt lease areas and $100.3 million for a lease off the central coast near Morro Bay.
BOEM qualified 43 potential bidders for the auction but no bids got more than 3 players in any round, according to the agency’s online tracking page. Bidding is to resume Wednesday at 10 a.m. Eastern/7 a.m. Pacific time.
California, with a 25 gigawatt offshore wind target set by state government, is seen as a potentially promising market by developers, but requiring the technical challenge and expense of feasible floating turbines anchored in deeper Pacific waters.
In an email to members shortly before bidding commenced Wednesday, the non-profit Business Network for Offshore Wind said the auction is closely watched by industry – but unlikely to generate a bidding war.
“The Network does not believe the California leases will fetch as high of auction fees as the New York Bight but will likely eclipse what we saw in the Carolinas,” the group said.
“The New York Bight had several key elements including a very visible path to offtake, strong monetary and public support from state governments, a visibly emerging port infrastructure and supply chain, and apparent willingness to tackle transmission.
“Today, the California market is not as strong, and adding in new technology development will likely results in a lower price. However, California is a premier market with strong political and public support and being the first to market is very attractive as auction prices will only rise over time.”