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Date is set for California offshore wind lease auction

The Bureau of Ocean Energy Management has announced that the auction for rights to develop waters off central and northern California will be held on Dec. 6, 2022. The auction represents the first ever along the U.S. Pacific Coast.
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The date has been set for California's first offshore wind lease auction.

The federal Bureau of Ocean Energy Management (BOEM) said that the auction for rights to develop waters off central and northern California will be held on December 6. The auction represents the first ever along the U.S. Pacific Coast.

“Today, we are taking another step toward unlocking the immense offshore wind energy potential off our nation’s west coast to help combat the effects of climate change while lowering costs for American families and creating good-paying union jobs," said Interior Sec. Deb Haaland.

The sale is expected to include three lease areas in the Morro Bay Wind Energy Area and two proposed areas in the Humboldt Wind Energy Area. Taken together, the auction covers approximately 373,268 acres, and has the potential to host over 4.5 GW of offshore wind generating capacity.

Auction details, lease terms and qualified bidding companies that can participate in the auction are outlined in a final sale notice to be published in the Federal Register. The sale includes lease stipulations to prioritize workforce training, domestic supply chain development, community benefits and engagement.

"As an industry, we are encouraged to see that BOEM’s Final Sale Notice incorporates many of the recommendations from the state, industry, and stakeholders on lease auction provisions, which aim to increase competition among developers, maximize savings and benefits for California ratepayers and affected stakeholders, ensure viability of a strong West Coast supply chain, and provide a clear path to achieve project completion and California’s offshore wind goals," Adam Stern, executive director of the Offshore Wind California trade group, said in a statement.

To date, BOEM has held 10 competitive lease sales and issued 27 active commercial wind leases in the Atlantic Ocean from Massachusetts to North Carolina.

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California offshore wind locations

The Morro Bay Wind Energy Area has a development capacity of 3 GW while the Humboldt Bay Wind Energy Area can support 1.6 GW. Both areas have wind speeds averaging around 9 m/s.

Because of their deep waters, both locations will require floating offshore wind equipment. Projects developed in the Morro Bay WEA and Humboldt WEA are likely to become the first floating offshore wind projects in operation in the US.

Challenges face the U.S. floating offshore wind market, however, in the forms of electric grid and supply chain constraints. The Humboldt Bay area can support around 150 MW of additional capacity without substantial grid upgrades, according to the report. Morro Bay, in Central California, was previously believed to be less constrained due to the impending retirement of the Diablo Canyon nuclear plant, a move that has since been delayed.

The California offshore wind projects will also be tasked with jump-starting new supply chains in the U.S.

The U.S. floating offshore wind market is expected to lean heavily on Europe, Asia, and the U.S. East Coast for supply chain support. The GWEC report estimated that vessel availability is likely to present a “major bottleneck” in the U.S. due to the Jones Act, which prevents non-U.S. built vessels from operating on offshore wind projects.

California pushes forward

In August, the California Energy Commission (CEC) adopted a report setting offshore wind goals that it said move the state closer to developing the energy resource off the state’s coast. 

The report set planning goals of 2,000-5,000 MW of offshore wind by 2030 and 25,000 MW by 2045.

At the time, David Hochschild, chair of the CEC, called the goals “ambitious yet achievable.” 

The CEC developed the report in coordination with federal, state, and local agencies and stakeholders including Tribal governments, fisheries, and other ocean users. It is the first of several products the CEC must prepare to create a strategic plan for offshore wind energy development as required by Assembly Bill 525. 

The report came after California Gov. Gavin Newsom called on energy regulators to increase the state’s offshore wind target to at least 20 GW by 2045. He asked the CEC to implement the goal as part of the Assembly Bill 525 process. In May, the CEC set a preliminary target of 3 GW of offshore wind by 2030 and 15 GW by 2045.

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