In advance of this week’s August 29, 2023 first-ever offshore wind energy lease sale in the Gulf of Mexico, the Business Network for Offshore Wind, together with Greater New Orleans Wind (GNO Wind), issued a comprehensive report entitled Unlocking the Gulf of Mexico’s Offshore Wind Energy Potential, which addresses the region’s unique potential for offshore wind development.
To access the report, click here.
The report highlights how the Gulf of Mexico’s history of innovation, robust offshore oil and gas experience, and strong supply chain has the potential to catapult offshore wind growth in the region. It also addresses the key hurdles, such as how the industry will need to develop technology that can maximize power output from an environment with lower average wind speeds than the East Coast coupled with seasonal hurricane activity, which must be overcome for the region to be successful.
“The Gulf of Mexico is uniquely prepared for the offshore wind industry with decades of offshore energy experience already under its belt,” said John Begala, vice president for federal and state policy at the Business Network for Offshore Wind.“Yes, the region has hurdles to overcome, including the creation of a regulatory framework for power offtake and the need to maximize generation in a lower wind speed environment. However, as has been the case for more than 70 years, the creative solutions developed here will impact the global offshore wind market.”
Unlocking the Gulf breaks down the offshore wind development process and highlights Gulf-based companies that have already been participating in the industry — despite the lack of projects in Gulf waters to this point. More than one in five offshore wind contracts identified by the Network’s Market Dashboard have gone to companies based in the Gulf of Mexico, demonstrating the region’s strong expertise.
This report comes ahead of tomorrow’s Gulf of Mexico’s first offshore wind lease auction. The report highlights how the Gulf of Mexico’s robust offshore oil and gas experience and strong supply chain has the potential to catapult offshore wind growth in the region. It also addresses the hurdles, including extreme weather and slower-than-average winds in the region the offshore wind industry must overcome to be successful.
Among the report’s key findings:
- A wide variety of Gulf companies’ experience in planning and permitting, manufacturing, and offshore construction, installation, and operations and maintenance make them well-positioned to kickstart offshore wind in the region.
- The nascent offshore wind market in the Gulf coupled with below-average wind speeds will likely lead to lower auction prices than previously seen.
- Gulf of Mexico states have yet to designate clear paths for power offtake, which must be addressed to create a successful market.
- Green hydrogen is particularly viable in the Gulf of Mexico, given local electricity rules and strong demand for hydrogen in Gulf coast industries.
The areas to be auctioned on August 29, 2023, by the Bureau of Ocean Energy Management have the potential to generate approximately 3.7 GW and power almost 1.3 million homes with clean, renewable energy.
The locations consist of a 102,480-acre area offshore Lake Charles, Louisiana, and two areas offshore Galveston, Texas, one comprising 102,480 acres and the other 96,786 acres.
To view detailed information about the final lease areas, lease provisions and conditions, and auction details, click here.
Details, along with a map of the area can be found on BOEM’s website.
Companies that have been pre-qualified to bid are:
- 547 Energy LLC
- Avangrid Renewables, LLC
- Coastal Offshore Renewable Energy LLC
- energyRe Offshore Wind Holdings, LLC
- Equinor Wind US LLC
- Gulf Coast Offshore Wind LLC
- 4 Gulf Wind Offshore LLC
- Hanwha Offshore North America LLC
- Hanwha Q CELLS USA Corp.
- Hecate Energy LLC
- Invenergy GOM Offshore Wind LLC
- RWE Offshore US Gulf, LLC
- Shell New Energies US LLC
- TotalEnergies Renewables USA, LLC
- US Mainstream Renewable Power, Inc.
“The Gulf of Mexico is poised to play a key role in our nation’s transition to a clean energy future,” Bureau of Ocean Energy Management (BOEM) Director Elizabeth Klein said. “Today’s announcement follows years of engagement with government agencies, states, ocean users, and stakeholders in the Gulf of Mexico region. We look forward to continued collaboration in the years to come.”
The lease sale follows the federal government’s third approval earlier this month of a commercial-scale, offshore wind energy project in the United States and is part of the leasing path announced by Interior Secretary Deb Haaland in 2021.
Earlier this year, the Department announced the Proposed Sale Notice for offshore wind energy development in the Gulf of Mexico. During the 60-day comment period, BOEM received comments on several lease stipulations that supported BOEM’s commitment to engage with underserved communities, ocean users and other stakeholders. Some of these stipulations, which are part of the Final Notice of Sale, include:
- Bidding credits to bidders who commit to supporting workforce training programs, developing a domestic supply chain for the offshore wind energy industry,
- Bidding credits for establishing and contributing to a fisheries compensatory mitigation fund or contributing to an existing fund to mitigate potential negative impacts to commercial and for-hire recreational fisheries caused by offshore wind energy development in the Gulf of Mexico, and
- Requiring that lessees provide a regular progress report summarizing engagement with Tribes and ocean users potentially affected by proposed offshore wind energy activities.
