Offshore wind rights near the Carolinas draw $315 million
Renewable developers spent $315 million buying the rights to install turbines off the coast of North and South Carolina in a government auction that underscored the allure of offshore wind even when no state mandates require it.
After 18 rounds of bidding Wednesday, a Duke Energy Corp. unit and TotalEnergies Renewables USA LLC were the provisional winners of two wind leases, each spanning about 55,000 acres, in Carolina Long Bay. Together, the tracts off Myrtle Beach, South Carolina, can hold enough turbines to provide 1.3 gigawatts of generation capacity, enough to power almost 500,000 homes, according to the Interior Department.
“We’re seeing the maturation of the market and an optimistic outlook for offshore wind in areas beyond our Northeastern states,” said Erik Milito, president of the National Ocean Industries Association that represents developers. “With three separate wind projects now in the area, and potentially more on the way, the Carolinas are positioned to be the next American offshore wind hub.”
The sale comes on the heels of a record-breaking $4.4 billion auction of six wind leases off the New York coast in February that underscored surging enthusiasm for renewable energy, fed by Northeast US state commitments to purchase carbon-free electricity. By contrast, the Carolina auction covered a smaller area, without nearby existing leases and ready-made infrastructure that could be leveraged by developers. And while previous auctions further up the US East Coast have been buoyed by nearby state mandates for offshore wind power that create near-guaranteed demand, North and South Carolina haven’t made similar commitments.
Duke Energy Renewables Wind LLC purchased a 55,154acre tract for $155 million, while TotalEnergies Renewables nabbed the smaller, 54,937-acre parcel for $160 million, according to the Interior Department. The winning bids averaged $2,861 per acre, almost triple the $1,043 per acre price in a 2018 sale of leases near Massachusetts that had been the high-water mark before February’s outlier auction near New York.
The purchase could help Duke satisfy new climate targets in North Carolina. Under a law enacted in October, the state’s electric sector must slash carbon dioxide emissions 70 percent by 2030.
State-led offshore wind solicitations are “the most important policy driving offshore wind in the US today,” said Timothy Fox, vice president of the ClearView Energy Partners research firm. “Today’s auction suggests that an emerging domestic offshore wind supply chain and demonstrable in-service projects may sufficiently demonstrate the viability of offshore wind in waters that do not directly serve active solicitations.”
The sold leases come with no guarantees of construction. Companies must secure permits from state and local authorities as well as the Interior Department, in a process that can take years.
Yet states and the federal government are seeking to accelerate offshore wind development along the US coast, which has lagged behind European countries in generating power from steady, strong gusts at sea. President Joe Biden has laid out a goal for 30 gigawatts of offshore wind-generating capacity installed by the end of the decade. Coastal states from New York to Louisiana also have committed to buy about 42 gigawatts of electricity from offshore wind installations.