WASHINGTON, July 20 (Reuters) – The United States said on Thursday the first offshore wind auction in the Gulf of Mexico will take place next month, a milestone for the industry, with President Joe Biden set to highlight his administration’s efforts to boost clean energy during the trip.
In February, the United States proposed expanding offshore wind farms to the Gulf of Mexico, introducing a new clean energy industry to the oil and gas production hub.
Biden has made the expansion of offshore wind a cornerstone of his fight against fossil fuel-driven climate change.
The Home Department said the sale will take place on August 29.
“We’re going to the Gulf,” Biden said in a speech in Philadelphia. Do you think I’m kidding? You ain’t seen nothing yet.”
Companies eligible to bid on the sale, according to the sales document, include units of European energy companies Equinor ( EQNR.OL ), Shell ( SHEL.L ), RWE ( RWEG.DE ) and Total Energies ( TTEF.PA ), all of which are already preparing U.S. offshore wind leases. Equinor and Shell have major oil and gas operations in the Gulf.
New entrants to the U.S. offshore wind industry include South Korea’s Hanwha ( 000880.KS ), U.S. renewable energy developer Hackett Energy and Houston private equity firm Quantum Capital.
The sale includes 102,480 acres of shoreline in Lake Charles, Louisiana, and two leases totaling nearly 200,000 acres of shoreline in Galveston, Texas, the White House said. Companies gamble for the right to develop those acres.
The areas have a power generation capacity of 3.7 gigawatts and will provide around 1.3 million homes with clean energy, according to the Ministry of Home Affairs.
The National Oceanic Industries Association (NOIA), which represents both offshore wind and oil and gas companies, said there was “tremendous synergy” between the two energy industries.
“With offshore wind coming to the Gulf Coast, many local companies now have the opportunity to actively participate in the construction of new wind projects closer to home,” NOIA President Eric Milito said in a statement.
The Biden administration held three offshore wind lease auctions last year, including the largest U.S. sales for areas along the New York and New Jersey coasts, which attracted a record $1.5 billion in bids and the first on California’s Pacific coast.
The Gulf’s low wind speeds, soft soil, and hurricanes are unique challenges for the industry. The Southeast has low energy costs that make it difficult for high-cost offshore wind generation to compete for electricity contracts.
Biden traveled to Philadelphia on Thursday to pitch the promise of a green economy to unionized workers, some of whom are skeptical that the solar, wind and electric vehicle industries can deliver the same economic punch to organized labor as oil refineries and fossil-fuel power plants.
Reporting by Jeff Mason, Timothy Gardner and Nicola Groom; Editing by Sonali Paul, David Holmes and Aurora Ellis
Our Standards: The Thomson Reuters Trust Principles.
[ad_2]