US Proposes First-Ever Offshore Wind Lease Sale on West Coast

On 26 May, the Department of the Interior (DOI) and its Bureau of Ocean Energy Management (BOEM) issued a Proposed Sale Notice (PSN) for potential commercial wind energy development at up to five areas within the two previously identified Wind Energy Areas (WEAs) off California.

The PSN contains proposed auction details and lease terms for offshore wind energy development in the Morro Bay Wind Energy Area and Humboldt Wind Energy Area which together cover 373,268 acres in federal waters and could accommodate 4.5 GW of installed offshore wind capacity.

According to earlier information, BOEM plans to hold the auction in the fourth quarter of this year.

This will be the first lease sale organised for areas offshore the US West Coast and the first where the country will award floating wind projects.

In the Morro Bay Wind Energy Area off central California, the US Government is proposing to put three lease areas up for auction and two will be offered in the Humboldt Wind Energy Area off northern California.

BOEM will publish the PSN in the Federal Register on 31 May to open a 60-day public comment period on the detailed information about the proposed lease areas, proposed lease provisions and conditions, and auction details provided in the PSN.

This will also be a window for developers that had not so far asked to be qualified for the lease sale to do so.

The proposed sale includes lease stipulations to prioritise workforce training, domestic supply chain development, and community benefits and engagement, on which BOEM will obtain public input through the comment period.

One of the potential stipulations is a 20 per cent bidding credit to developers who commit to invest in programmes that will advance workforce training or supply chain development, or both.

Furthermore, the lease sale could include a 2.5 per cent bidding credit to bidders who have executed or commit to executing a community benefit agreement with a community or ocean users such as commercial fisheries.

The US is also likely to set a requirement that lessees make every reasonable effort to enter into a project labour agreement covering the construction of any project proposed for the lease area.

BOEM published a Call for Information and Nominations for wind areas offshore California back in 2018 and identified three Call Areas on the state’s Outer Continental Shelf (OCS): Humboldt Call Area offshore the north coast, and the Morro Bay and Diablo Canyon Call Areas offshore the central coast.

The Morro Bay and Diablo Canyon Call Areas were initially deemed not suitable for wind energy development by the US Department of Defense (DoD); however, BOEM, DoD, and state authorities worked together to find a way to accommodate offshore wind development within and adjacent to the Morro Bay Call Area.

This time last year, the Department of the Interior, DoD, and the State of California announced an agreement to advance the Morro Bay 399 Area – an area within and adjacent to the initial 2018 Morro Bay Call Area – as a Wind Energy Area (WEA), saying it could support approximately 3 GW of offshore wind capacity. The Humboldt Area was advanced as a potential WEA.

In July 2021, BOEM delineated two extensions in the Morro Bay 399 Area, known as the East and West Extensions, in a Call for Information and Nominations to solicit public input and industry interest in the extensions. The same month, the government agency started working on the environmental assessment (EA) for the Humboldt WEA, after completing the Area identification (Area ID) process for it.

For the Morro Bay WEA, BOEM completed the Area ID process in November 2021.

The agency announced the availability of the draft EA for the Humboldt WEA in January 2022, which initiated a 30-day public comment period and subsequently a revision to the EA. The revised EA and the finding of no significant impact were published on 5 May.

For the Morro Bay WEA, BOEM started working on the draft EA in November 2021, after completing the Area ID process, and published the draft EA on 6 April. On 4 May, BOEM announced the extension of the 30-day comment period by ten days in response to stakeholder request.

According to the agency, the Morro Bay EA will be concluded before the Final Sale Notice (FSN) and will inform BOEM’s decision whether to proceed with it.

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