November 3, 2023 — The Gulf of Mexico this summer saw the first-ever opening of an auction of leases for offshore wind production. But the expectations for robust bidding haven’t been realized.
The Biden administration this week announced what it called the largest offshore wind project in the nation. The government says the opening of a fifth offshore wind operation, this one off the Virginia coast, comes with the potential to power 900,000 homes. But the wind appears to have gone out of the sails for this summer’s inaugural round of bidding for wind leases in the Gulf of Mexico. Our colleagues over at The Indicator From Planet Money, Wailin Wong and Darian Woods, looked into why.
DARIAN WOODS, BYLINE: So this year, in the late summer, Mike Celata was in his New Orleans office early. While there was a hurricane that happened to be brewing in the Gulf of Mexico, Mike was fixated on his screen for another big event for the Gulf.
WAILIN WONG, BYLINE: Mike had helped set up the first ever auction for offshore wind farms in the region. He works for the Bureau of Ocean Energy Management. That’s a government agency that manages how the sea owned by the government is used for things like drilling oil or gas.
MIKE CELATA: It was a lot of anticipation. We were just waiting to see what those first bids would be. A lot of excitement.
WONG: This auction could mean pretty high bids. A similar patch of ocean near New York had gone for over $1 billion.
WOODS: But the sea patches did not go for anywhere near $1 billion. One of the three sites sold for 5.5 million. And two didn’t even get any offers.
MARK REPSHER: It was a little deflating.
WOODS: Mark Repsher, a partner at PA Consulting, which is a clean energy advisory that worked with some of the energy companies that were considering bidding for the auction.
WONG: Mark says there are some downsides to the area. If you think about what other kinds of electricity you could generate in the region, like in Texas, there are cheaper options than to drill giant windmills into the Gulf floor, like solar power.