The results of the BOEM lease auction for floating wind sites off the coast of California shows the industry is maturing and taking floating wind seriously. Quiet congratulations to winners we helped along the way, of course.
The auction winners committed $0.76 billion dollars to secure about 6 GW of offshore wind leases without permits, without a guaranteed route to market and with a spend likely to be close to double that before financial close. The winners will also have to overcome local supply chain and infrastructure limitations , and large distances from other offshore wind markets.
The results are strong evidence of the industry’s belief in California’s future energy market and floating offshore wind technology.
The average of $2k/acre is, of course, way down on New York Bight’s ground-breaking $9k/acre for fixed-foundation sites but much of the difference is to do with confidence in offtake revenue in the two markets. Interestingly, it is not far below the $2.9k/acre paid in May’s Carolina Long Bay lease auction for fixed-foundation sites.
So 4 of the global top 10 offshore wind developers, by fixed-foundation pipeline size, add a significant chunk of floating capacity. We have always said fixed or floating will eventually become a choice like monopile or jacket, with leading developers active in both. We don’t underestimate the effort needed to get to that point. Many technical, environmental and regulatory uncertainties need addressing. But these results move the story on in the right direction.
We have seen a bit of a surge of hype around floating in the last 2 years, then a consolidation (a decreasing of expectation from some). These results show a mature commitment. Gutsy, yes, but 30+ years in the wind industry has shown me that’s the way to succeed – and to make a difference to the planet.
We’ll provide more insight once round-by-round results are published.