A much-promoted first lease sale for Gulf of Mexico offshore wind got just one winning bid of $5.6 million for 102,480 acres south of Lake Charles, La., while lease offerings east of Galveston, Texas, had no bids, the federal Bureau of Ocean Energy Management said Tuesday.
The bidding opened with $5,124,000 for the Lake Charles offshore lease and got two offers. On the second round only RWE Offshore US Gulf LLC persisted and won with its second bid for $5.6 million.
It was a stark contrast to frenetic bidding in February 2022 for New York Bight wind leases, when Bight Wind Holdings took the most-sought prize, a nearly 126,000-acre tract 50 miles east of Barnegat Light, N.J., for $1.1 billion, beating up to five competitors in the process.
BOEM lease offerings in Northeast and Mid-Atlantic waters are attractive to wind developers for being close to the East Coast megalopolis cluster of cities and suburbs. Wind power boosters look to the Gulf of Mexico for opportunities to supply the region’s energy-thirsty needs for petrochemical processing, and producing hydrogen as a new fuel for industry and shipping.
But the two lease areas off Galveston, at 102,480 acres and 96,786 acres, failed to get any bids on BOEM’s asking price of $5,124,000 million and $4,839,300 respectively, according to the agency’s online summary Tuesday.
Northeast state governments have made strong commitments to buying power from future offshore wind projects. Political support is spotty in Texas with its heritage of oil and gas dominance, but Louisiana’s offshore industry sees big opportunity with building and operating offshore wind projects, and the state’s political leaders are lined up in support.
“Today’s auction results show the important role state public policy plays in offshore wind market development,” said Liz Burdock, CEO of the Business Network for Offshore Wind. “Gulf expertise in offshore construction is unparalleled, and their innovative solutions will continue to drive the U.S. and global offshore wind industry forward.”