USA: BOEM to Lease Area Offshore Virginia for Wind Energy Development

As part of President Obama’s comprehensive plan to move economy toward domestic clean energy sources and begin to slow the effects of climate change, Secretary of the Interior Sally Jewell and Bureau of Ocean Energy Management (BOEM) Director Tommy P. Beaudreau announced that BOEM will hold its second competitive lease sale for renewable energy on the U.S. Outer Continental Shelf (OCS).

The auction, scheduled to take place on Sept. 4, will offer nearly 112,800 acres offshore Virginia for commercial wind energy leasing.

In June, Secretary Jewell and Director Beaudreau announced the nation’s first wind energy lease sale for an area offshore Rhode Island and Massachusetts, which will be held on July 31.

 “The competitive lease sale offshore Virginia will mark an important transition from planning to action when it comes to capturing the enormous clean energy potential offered by Atlantic wind,” said Jewell. “Responsible commercial wind energy development has the potential to create jobs, increase our energy security, and strengthen our nation’s competitiveness.”

Under the terms of the Final Sale Notice, the wind energy area offshore Virginia will be auctioned as a single lease. The area is located 23.5 nautical miles from the Virginia Beach coastline and has the potential to support more than 2,000 megawatts of wind generation – enough electricity to power approximately 700,000 homes. As part of President Obama’s comprehensive climate action plan, he challenged Interior to re-double efforts on the renewable energy program by approving an additional 10,000 megawatts of renewable energy production on public lands and waters by 2020.

The area, composed of 19 full OCS blocks and 13 sub-blocks, was selected after intensive work with the Commonwealth and stakeholders to avoid existing uses of the OCS offshore Virginia, including sensitive ecological habitat and shoals along the coast north of the mouth of the Chesapeake Bay, military training areas, marine vessel traffic, a dredge disposal site, and areas of concern specified by the National Aeronautics and Space Administration Goddard Space Flight Center’s Wallops Flight Facility.

In February, 2011 in Norfolk, Va., former Secretary of the Interior Ken Salazar and former Secretary of Energy Steven Chu unveiled a coordinated strategic plan to accelerate the development of offshore wind resources. As part of the ‘Smart from the Start’ program for expediting commercial-scale wind energy on the federal OCS, Interior has identified Wind Energy Areas to spur responsible development of this abundant renewable resource.

 “This lease sale announcement today is the culmination of an extraordinarily collaborative effort with our federal, tribal, state and local government partners,” said Beaudreau. “With the help of key stakeholders, including the wind industry, maritime interests and conservation organizations, we have identified an area offshore Virginia that is well suited for commercial wind energy development and thoroughly reconciled with the environment and other important uses.”

The area available for auction is identical to the one announced in the Proposed Sale Notice that was published in the Federal Register on Dec. 3, 2012, for a 60-day public comment period. BOEM carefully considered public comments before developing the Final Sale Notice. The Proposed Sale Notice, public comments and BOEM’s responses can be viewed on BOEM’s website by clicking here.

BOEM will publish the Final Sale Notice in the Federal Register on July 23. The following companies are eligible to participate:

•  Apex Virginia Offshore Wind, LLC
• Virginia Electric and Power Company (“Dominion Virginia Power”)
• Energy Management, Inc.
• EDF Renewable Development, Inc.
• Fisherman’s Energy, LLC
• IBERDROLA RENEWABLES, Inc.
• Sea Breeze Energy, LLC
• Orisol Energy U.S., Inc.

“After careful review, BOEM has determined that these companies are legally, technically and financially qualified to participate in the upcoming lease sale,” added Beaudreau. “We applaud their leadership and look forward to overseeing a fair and competitive leasing process.”

In addition to the list of eligible bidders, the Final Sale Notice contains specific information about deadlines and milestones for bidders; the area available for leasing; lease provisions and conditions; auction details; criteria for evaluating bids; award procedures; and lease execution and other information.

The sale is being conducted using an online bidding system and follows an ‘‘ascending clock’’ auction format. BOEM will set an initial asking price for the lease area and increase that price incrementally based on the number of active bidders in each round until no more than a single active bidder remains in the auction.

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Press release, July 23, 2013; Image: doi