Deepwater Wind Secures Both Offshore Wind Energy Leases

Following the nation's first competitive sale of two offshore renewable energy leases on Wednesday, Providence-based company Deepwater Wind has now secured the rights to construct commercial wind energy farms in a 257-square-mile area of federal waters off the coast of Rhode Island and Massachusetts. 

Of the nine companies that met the criteria required to take part in the auction, only two submitted bids apart from Deepwater; Sea Breeze Energy of Philadelphia and U.S. Wind, part of an Italian corporation. Both leases were auctioned online simultaneously, under the supervision of the Bureau of Ocean Energy Management (BOEM). In order to bid, the companies were required to put down a $450,000 deposit for each of the two leases by July 17. 

At the close of the auction's eleventh round, Deepwater Wind had surfaced as the provisional winner, agreeing to pay $3.7 million for the 97,500-acre north section of the designated waters, and $94,000 for the 67,250-acre south section. The cost variance between the two leases is explained by the fact the the north section's waters are not only closer to shore, but shallower as well, allowing for a more suitable and cost-effective wind farm location. The company cannot officially be named the winner until a review of the auction is completed within 30 days by the Federal Trade Commission and the Department of Justice.

“This is a major step in standing up offshore wind generation in this country,” said BOEM Director Tommy Beaudreau, during a press call on Wednesday.

In the months leading up to the auction, Deepwater Wind had locally been considered to be the top contender thanks to a joint-development agreement made with the state in 2009. According to the company, it will also make a $500,000 rent payment annually until the wind farm is operational.

Deepwater Wind will now have six months following execution of the lease to submit a Site Assessment Plan for environmental and technical review. Once BOEM approves the plan, in addition to other design and installation reports, construction may begin in the wind lease area. A 2017 start is predicted, with power production currently estimated at 2018.

"This is an enormous step forward for the industry," said Deepwater Wind CEO Jeffrey Grybowski in a statement Wednesday. "This is the best site for offshore wind in the United States, bar none."

Apart from harnessing wind energy, Rhode Island will also benefit from the addition of many new jobs that will be made available throughout the wind farm process.

“The first competitive auction for wind energy development in the nation is an important step in a process that could ultimately bring badly needed jobs to our state and reduce our dependence on fossil fuels,” said Senator Whitehouse following the auction. 

Sen. Whitehouse went on to say that “Rhode Island is poised to be a leader in the development of wind energy."