USA: Interior Completes Second Lease Sale Offshore Virginia

As part of President Obama’s Climate Action Plan to create American jobs, develop domestic clean energy sources and cut carbon pollution, the Interior Department completed the nation’s second competitive lease sale for renewable energy in federal waters, garnering $1,600,000 in high bids for 112,799 acres on the Outer Continental Shelf offshore Virginia.

Virginia Electric and Power Company is the provisional winner of the sale, which auctioned a Wind Energy Area approximately 23.5 nautical miles off Virginia Beach that has the potential to support 2,000 megawatts of wind generation – enough energy to power more than 700,000 homes.

The sale follows a July 31 auction of 164,750 acres offshore Rhode Island and Massachusetts for wind energy development that was provisionally won by Deepwater Wind New England, LLC, generating $3.8 million in high bids.

 “This year’s second offshore wind lease sale is another major milestone in the President’s all-of-the-above energy strategy and demonstrates continued momentum behind a robust renewable energy portfolio that will help to keep our nation competitive and expand domestic energy production while cutting carbon pollution,” said Secretary of the Interior Sally Jewell. “Today’s sale is the result of a great deal of collaboration and planning with the Commonwealth of Virginia, which has been a leader in advancing offshore renewable energy for the Atlantic coast and an enthusiastic partner in this effort.”

“Today’s renewable energy lease sale offshore Virginia is another significant step forward in the President’s call for action to address climate change and the Administration’s all-of-the-above energy strategy,” said Bureau of Ocean Energy Management (BOEM) Director Tommy Beaudreau. “I congratulate Virginia Electric and Power Company and we look forward to overseeing their development of the Virginia wind energy area, which will create jobs, increase our energy security and provide abundant sources of clean renewable power.”

Efforts to spur responsible development of offshore wind energy are part of a series of Obama Administration actions to increase renewable energy both offshore and onshore by improving coordination with state, local and federal partners. The Virginia Renewable Energy Task Force has been a leading agent in intergovernmental collaboration for wind energy development offshore Virginia.

Since 2009, Interior has approved 47 wind, solar and geothermal utility-scale projects on public lands, including associated transmission corridors and infrastructure to connect to established power grids. When built, these projects could provide more than 13,300 megawatts – enough energy to power more than 4.6 million homes and support more than 19,000 construction and operations jobs.

As part of the President’s comprehensive Climate Action Plan, he has challenged Interior to re-double efforts on its renewable energy program by approving an additional 10,000 megawatts of renewable energy production on public lands and waters by 2020.

At the same time, under the Administration’s all-of-the-above energy strategy, domestic oil and gas production has grown each year President Obama has been in office, with domestic oil production currently higher than at any time in two decades; natural gas production at its highest level ever; and renewable electricity generation from wind, solar, and geothermal sources having doubled. Combined with recent declines in oil consumption, net oil imports in 2012 fell to the lowest level in 20 years.”

BOEM auctioned the Wind Energy Area offshore Virginia as a single lease, containing 19 whole Outer Continental Shelf blocks and 13 sub-blocks.

The auction lasted 1 day, consisting of 6 rounds before determining the provisional winner. In addition to Virginia Electric and Power Company the following company participated in the auction: Apex Virginia Offshore Wind, LLC. Following the auction, the Attorney General, in consultation with the Federal Trade Commission, will have 30 days in which to complete an antitrust review of the auction.

The lease will have a preliminary term of six months in which to submit a Site Assessment Plan to BOEM for approval. A Site Assessment Plan describes the activities (e.g., installation of meteorological towers and buoys) the lessee plans to perform for the assessment of the wind resources and ocean conditions of its commercial lease.

After a Site Assessment Plan is approved, the lessee will have up to four and a half years in which to submit a Construction and Operations Plan (COP) for approval, which provides a detailed outline for the construction and operation of a wind energy project on the lease. If the COP is approved, the lessee will have an operations term of 33 years.

BOEM is expected to announce additional auctions for Wind Energy Areas offshore Maryland, New Jersey, and Massachusetts later this year and in 2014.

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Press release, September 05, 2013; Image: doi