Interior to shrink Mid-Atlantic wind areas, begin leasing OCS (Platts Energy Week)

By: Nick Juliano

From: Platts Energy Week

Electric Power Daily (22-Jun-11)

Environmental reviews for leases of Outer Continental Shelf blocks in the Mid-Atlantic for wind farm development should be complete later this year, clearing the way for the leasing process to begin, Deputy Interior Secretary David Hayes said Tuesday.

The reviews will result in Interior’s Bureau of Ocean Energy Management Regulation and Enforcement reducing the size of eligible lease areas based on input from states and other federal agencies, he said.

Hayes’ comments came at the Department of the Interior’s headquarters during a public workshop on a new coastal and marine spatial planning process.

BOEMRE has spent about a year collaborating with governors of East Coast states, other federal agencies, industry, conservation groups and other stakeholders to identify the “least conflict areas” for offshore wind development, Hayes said.

The agency in February proposed “wind energy areas” based on the availability of wind resources and lack of conflict before preparing an environmental assessment for Mid-Atlantic wind leases offshore Delaware, Maryland, New Jersey and Virginia. That process should be wrapping up by the end of the year, clearing the path for leasing to begin, Hayes said.

“Based on that we are revising downwards the size of the areas, and then we’re going to go out for leases later this year for the first four Mid-Atlantic states,” Hayes said.

Whether BOEMRE issues leases by the end of the year depends on how many companies express interest in OCS blocks identified as potential wind farm locations.

If only one company shows interest in an area, a noncompetitive process could result in a lease being issued by the end of the year, said a BOEMRE source, speaking anonymously to clarify Hayes’ remarks. Competitive lease sales likely will take longer to complete, although the bidding process would begin by the end of this year, after the EA is complete.

For example, only one company, NRG Bluewater Wind Delaware, responded to a request for interest BOEMRE published last year for wind leases offshore Delaware, meaning a lease could be issued by the end of this year, the source said. Interior announced in March it was initiating the process to offer a non-competitive lease to NRG Bluewater, after several solicitations showed no competitive interest in the area.

Other states in the region have attracted more interest from offshore wind companies, although the process is not as far along. Eight companies submitted initial indications of interest in January in response to request for interest for OCS blocks offshore Maryland, and 11 showed interest earlier this month in blocks offshore New Jersey in response to a call for information and nominations, according to documents posted on BOEMRE’s website. Two companies have submitted unsolicited applications for projects off Virginia, although no formal nomination or request for information process has started for that state, according to the website.

In May, BOEMRE finished a similar consultation process for waters off the coast of Massachusetts. There, it eliminated more than half of the federal waters it had initially proposed be open to leasing.

Hayes did not say by how much the Mid-Atlantic areas would be reduced