WASHINGTON (Reuters) – The United States said on Thursday that the first auction of offshore wind power in the Gulf of Mexico will be held next month, an industry highlight President Joe Biden discussed during a trip to highlight the administration’s efforts to promote clean energy.
In February, the United States proposed expanding offshore wind energy development in the Gulf of Mexico, bringing the nascent clean energy industry into a major oil and gas production hub.
Biden has made the expansion of offshore wind a cornerstone of his agenda for combating climate change caused by fossil fuels.
The Home Office said the sale would take place on August 29.
“We’re going to the Gulf,” Biden said in a speech in Philadelphia. Do you think I’m kidding? You haven’t seen anything yet.”
According to the sale document, companies eligible to bid on the sale include units of European energy companies Equinor (EQNR.OL), Shell (SHEL.L), RWE (RWEG.DE) and TotalEnergies (TTEF.PA), all of which are already developing US offshore wind leases. Equinor and Shell also have major oil and gas operations in the Gulf.
New entrants to the US offshore wind industry include South Korean divisions of Hanwha (000880.KS), US renewable energy developer Hecate Energy, and Houston private equity firm Quantum Capital.
The White House said the sale would include 102,480 acres of lease space off the coast of Lake Charles, Louisiana, and two leasehold lots totaling nearly 200,000 acres off Galveston Beach, Texas. Companies will bid on the right to develop those acres.
The Ministry of Interior said the regions have the capacity to generate about 3.7 gigawatts of electricity, providing nearly 1.3 million homes with clean energy.
The National Ocean Industries Association (NOIA), which represents both oil and gas and offshore wind companies, said there was “remarkable collaboration” between the two energy industries.
“With the introduction of offshore wind in the Gulf Coast, many local businesses will now have the opportunity to actively participate in building new wind projects closer to home,” NOIA President Eric Milito said in a statement.
The Biden administration has held three offshore wind lease auctions, including the largest-ever U.S. sale last year of offshore New York and New Jersey, which attracted $1.5 billion in bids, and the first ever off California’s Pacific coast.
Low wind speeds in the Gulf, soft soil and hurricanes are potential challenges that the industry can face that are unique to the region. The Southeast also enjoys low energy prices, which can make it difficult for high-cost offshore wind generation to compete for electricity contracts.
Biden traveled to Philadelphia on Thursday to promise a green economy to unionized workers, some of whom remain skeptical that the solar, wind and electric car industries can deliver the same economic hit to organized labor as oil refineries and fossil-fuel power plants.
(Reporting by Jeff Mason, Timothy Gardner, and Nicola Groom) Editing by Sonali Paul, David Holmes, and Aurora Ellis
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