Auction for the right to build wind farms off New York and New Jersey raises a record $4.37 billion

Offshore wind farm.
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The federal government on Friday announced a record $4.37 billion sale of six offshore wind leases off the coasts of New York and New Jersey, moving forward the Biden administration’s goal to transition from fossil fuels to renewable energy sources.

The auction by the U.S. Bureau of Ocean Energy Management is the first offshore wind lease sale under President Joe Biden. Once the sites are fully developed, the sale of more than 488,000 acres is expected to produce up to 7 gigawatts of clean energy, enough to power nearly 2 million homes, the agency said.

The Biden administration, as part of its broader agenda to address climate change, has committed to deploy 30 gigawatts of offshore wind energy by 2030, enough to power 10 million homes. The U.S. offshore wind energy sector presents a $109 billion revenue opportunity to businesses in the supply chain in the next ten years, according to a recent report by the Special Initiative on Offshore Wind, an independent project at the University of Delaware’s College of Earth, Ocean and Environment.

The U.S. currently has only two offshore wind facilities, off the coasts of Rhode Island and Virginia. The Biden administration last year approved development of the country’s first commercial offshore wind farm located off the Massachusetts coast. The Bureau of Ocean Energy Management is also set to review more than a dozen plans for commercial offshore wind facilities by 2025.

This week’s auction allowed offshore wind developers to bid on six offshore wind energy lease areas. The top bidder was Bight Wind Holdings, which paid $1.1 billion for a 125,964 acre tract off the coast of Long Beach Island in New Jersey.

“This week’s offshore wind sale makes one thing clear: the enthusiasm for the clean energy economy is undeniable and it’s here to stay,” Interior Secretary Deb Haaland said in a statement.

“The investments we are seeing today will play an important role in delivering on the Biden-Harris administration’s commitment to tackle the climate crisis and create thousands of good-paying, union jobs across the nation,” Haaland said.

The National Ocean Industries Association, an offshore energy industry organization, called the auction a watershed moment for the U.S. offshore wind sector and said it reflected the industry’s continued growth.

“The record-shattering interest in the New York Bight lease sale is testament to how bright the American offshore wind outlook is and how confident developers are in the strength of the U.S. offshore wind industry as a whole,” NOIA President Erik Milito said in a statement.

The American Clean Power Association, a trade group that represents the renewable energy industry, said it supported the Bureau of Ocean Energy Management’s goal to conduct six more lease sales through 2024.

“Development from this sale will create and support tens of thousands of new domestic jobs and help to revitalize our coastal communities,” ACPA CEO Heather Zichal said in a statement.

“We challenge policymakers to provide even more certainty to this new industry, ensuring that the American people benefit from its growth and job-creating potential,” Zichal said. “For too long the U.S. has lagged behind other countries in offshore wind development.”