The winning bids for the first-ever US lease auction to build industrial-scale floating wind farms off the West Coast totaled $757 million on Wednesday, coming from largely European businesses, according to a report by AP.
Five lease areas, two in northern California and three in central California were up for auction. They are all around 25 miles off the coast and have the capacity to produce 4.5 gigawatts of energy, which is enough to power 1.5 million homes.
The total area of the leases in the Pacific Ocean is 583 square miles (1,510 square kilometers), as per AP's report.
Who Made the Winning Bids?
The winning bids were forwarded by the French-Portuguese joint venture Ocean Winds' Central California Offshore Wind, the Norwegian company Equinor, the German company RWE AG, and the Danish company Copenhagen Infrastructure Partners' California North Floating.
The sole American business that submitted a successful offer was Invenergy.
America's coasts are just starting to see a growth in offshore wind, and this is the country's first venture into floating wind farms. Most of the auctions are those that are moored to the seafloor, according to AP.
The demand for offshore wind is growing at the height of climate change concerns. According to a July report by the International Renewable Energy Agency, offshore winds are also becoming more affordable. The cost of generating this renewable has decreased by 60% since 2010 and last year it fell by 13%.
Lower Turnout of Bids
The auction's proceeds fell short of the $4.37 billion produced by a previous offshore wind lease sale off the East Coast, which was anticipated by one industry group.
The lack of maturity in the West Coast offshore wind market and the emerging technologies required for floating wind farms in deep waters, according to industry analysts, are likely to blame for this week's lower bids.
They claimed that uncertainty around transmission infrastructure and permitting also contributed to the lower turnout of winning bids.
It is worth noting that most of the winning businesses have already dipped their toes in the field of traditional offshore wind off the US East Coast and floating offshore wind overseas.
The biggest offshore wind developer in the US, Equinor, is responsible for building the very first floating wind farm in the world in 2017 in Scotland.
The company recently submitted a bid of $130 million for a 2-gigawatt lease off the coast of Morro Bay in central California. Equinox said that the lease area has the capacity to produce enough energy to power nearly 750,000 homes.
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