As part of President Obama's comprehensive Climate Action Plan to create American jobs, develop domestic clean energy resources and cut carbon pollution, the Bureau of Ocean Energy Management (BOEM) today held the nation's third competitive lease sale for renewable energy in federal waters, which offered nearly 80,000 acres offshore Maryland for potential wind energy development.
The provisional winner of today's lease sale is US Wind Inc. When fully built, this wind energy area could generate enough energy to power about 300,000 homes.
"Today's results are a major achievement and reflect industry confidence as we strengthen our nation's foothold in this new energy frontier," said Secretary Sally Jewell. "I want to thank Governor Martin O'Malley, his team and members of BOEM's Maryland Intergovernmental Renewable Energy Task Force for all of their hard work and leadership leading up to today's successful auction. The collaboration and thoughtful planning that went into this lease sale will serve as a model as we continue up and down the coast in our efforts to ensure wind energy is developed in the right way and in the right places."
BOEM auctioned the Maryland Wind Energy Area as two leases, referred to as the North Lease Area (32,737 acres) and the South Lease Area (46,970 acres). US Wind Inc. submitted the provisionally winning bid for both lease areas. For a map of the lease areas, click here.
Today's announcement builds on Interior's work to stand up a sustainable offshore wind program for the Atlantic Coast. Prior to today's auction, BOEM has awarded five commercial wind energy leases off the Atlantic coast: two noncompetitively issued leases (one for the proposed Cape Wind project in Nantucket Sound offshore Massachusetts and one offshore Delaware); and three competitively-issued leases (two offshore Rhode Island-Massachusetts and another offshore Virginia). The competitive lease sales generated over $5 million in winning bids for more than 277,500 acres in federal waters. BOEM is expected to hold additional competitive auctions for Wind Energy Areas offshore Massachusetts and New Jersey in the coming year.
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 Maryland Renewable Energy Task Force has been a leading agent in intergovernmental collaboration for wind energy development offshore Maryland.
Since 2009, Interior has approved 52 wind, solar and geothermal utility-scale projects on public or tribal lands, including associated transmission corridors and infrastructure to connect to established power grids. When built, these projects could provide about 14,000 megawatts -- enough energy to power nearly 4.8 million homes and support more than 20,000 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, for a total of 20,000 megawatts 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.
Today's wind energy lease sale resulted in a provisionally winning bid of $8,701,098. The auction lasted 1 day, consisting of 19 rounds before determining the provisional winner. In addition to US Wind Inc., the following companies participated in the auction: Green Sail Energy LLC and SCS Maryland Energy LLC.
"We're pleased to see such strong commercial interest in today's auction," said BOEM Acting Director Cruickshank. "We will continue to work closely with the Task Force members and the public on any future wind energy projects proposed for these leases by US Wind Inc."
The Maryland Wind Energy Area is located, at its closest point, about 10 nautical miles offshore Ocean City, Md., and has the potential to support between 850 and 1450 megawatts of commercial wind generation, according to Department of Energy's National Renewable Energy Laboratory.
The Attorney General, in consultation with the Federal Trade Commission, will have 30 days in which to complete an antitrust review of the auction. BOEM will then send unsigned copies of the lease form to the winning bidder, who will have 10 days to sign and return the leases, file required financial assurance and pay the balance of the winning bid.
Each lease will have a preliminary term of one year, during which the lessee will submit a Site Assessment Plan to BOEM for approval. A Site Assessment Plan describes the activities (installation of meteorological towers and buoys) a lessee plans to perform for the assessment of the wind resources and ocean conditions of its commercial lease area.
If a Site Assessment Plan is approved, the lessee will then have up to 4½ years in which to submit a Construction and Operations Plan (COP) to BOEM for approval. This plan provides detailed information for the construction and operation of a wind energy project on the lease. After BOEM receives a COP from a lessee, BOEM will conduct an environmental review of that proposed project. Public input will be an important part of BOEM's review process.
If the COP is approved, the lessee will have an operations term of 25 years.