GoM Wind Sale Canceled Due to Low Interest, BOEM Gets Unsolicited Request

Lack of competative interest led BOEM to cancel the planned Gulf of Mexico auction (file photo)

Published Jul 26, 2024 2:34 PM by The Maritime Executive

 

Efforts to move offshore wind energy forward in the Gulf of Mexico took a surprising turn on Friday as the Bureau of Ocean Energy Management again reported low overall interest in the area. However, they did receive a single unsolicited request for two possible lease areas. 

BOEM announced in March that it was planning to move forward with the second offshore lease auction for properties in the Gulf of Mexico. They proposed four potential lease areas off the coast of Louisiana and Texas with a total of over 410,000 acres. To possibly create further interest in the region, they added provisions for the wind energy to be used in the production of hydrogen or other energy products. 

The comment period closed in May, and today BOEM reports it is canceling the sale “due to a lack of competitive interest.” The comment period generated 25 responses and one company that expressed interest in participating in the proposed auction sale. BOEM said however it may decide to move forward with a lease sale in the future.

Hecate Energy Gulf Wind however submitted an unsolicited lease request for two potential properties that were part of the areas initially defined in 2021. The government had proposed 14 potential wind areas along the coastline of the Gulf of Mexico ranging from Louisiana west to Texas. Hecate, based in Chicago, has a large pipeline of renewable energy projects mostly for solar as well as onshore wind and power storage.

The areas targeted by Hecate are on the Outer Continental Shelf located near southeast Texas. One is over 74,000 acres and the other is over 142,000 acres. The areas are different than the ones in the now canceled sale proposal.

Under the process established for BOEM, the bureau will now issue a request seeking competitive interest for the areas targeted by Hecate. They plan to publish the request on Monday, July 29, and if other companies come forward to express interest or comment on the situation, BOEM could move forward with a competitive lease sale for the two areas. If no companies register interest, BOEM may decide to move forward with a noncompetitive lease.

Oceantic Network (formerly the Business Network for Offshore Wind), issued a statement saying the latest developments demonstrate that the Gulf of Mexico offshore wind market is moving forward with key policies failing into place. They highlight Louisiana working on its state offshore wind roadmap. The Department of Energy is working on a wider transmission study for the region while the group highlights the contribution of the region to the industry. Notably, many of the vessels to support the offshore wind industry are being built at Gulf of Mexico shipyards.

Companies, so far, however, have shown limited interest in developing offshore wind farms in the region. Analysts in the past had said that the Gulf of Mexico features slower wind speeds and higher hurricane risks. Further, Gulf Coast states generally had lower electricity prices and no state purchase mandates to support the offshore wind energy industry.

BOEM ran the first-ever offshore wind auction in the Gulf of Mexico in August 2023 and only RWE submitted a bid. The company paid $5.6 million for one of the three areas in the sale but told reporters it was still considered how the site might be developed long-term.

TotalEnergy Buys Into RWE Dutch Wind Farm to Power Hydrogen Production

TotalEnergies purchased half RWE's first Dutch wind farm and will use the power for hydrogen production (RWE file photo)

Published Jul 25, 2024 8:39 PM by The Maritime Executive

The Dutch offshore wind farm OranjeWind in the Hollandse Kust West VII field promises to become one of the most innovative and integrated offshore wind farms. Germany’s RWE which won the tender for the site in 2022 reports it sold 50 percent to France’s TotalEnergies, which then announced it will its portion of the power for the production of green hydrogen.

Located in the North Sea, just over 30 miles off the Dutch coast, OranjeWind calls for an integrated approach matching intermittent electricity production from renewables with flexible energy demand. As part of the integration into the Dutch energy system, each partner will deliver their portion of the power for uses ranging from the electrolyzers for the hydrogen production as well as for smart charging solutions for electric vehicles, e-boilers for heating, and battery storage.

The concept for the OrangeWind project is to accelerate the commercial application of new offshore technologies. To efficiently use the ocean space, an offshore demonstration floating solar farm is currently being developed with SolarDuck. The partners are considering the use of scanning LiDar (Light Detection and Ranging system) that can accurately measure wind at long ranges, and other elements are developing a seabed battery system along with a pumped hydro-storage system.

TotalEnergies will devote its portion of the 795 MW project to power a 350 MW electrolyzer. It will produce about 40,000 tons per year of green hydrogen. This green or low-carbon hydrogen will be used to replace the hydrogen currently used in TotalEnergies’ refineries. They expect will avoid the emission of approximately 400,000 tons of CO2 per year.

The companies did not announce the purchase price for the share of the project but reported that they have jointly taken the final investment decision for the project. It will consist of 53 Vestas 15 MW turbines. RWE will lead the development with offshore construction scheduled to start in 2026. Jan De Nul was contracted to transport and install the foundations and wind turbines, using its floating heavy lift vessel Les Alizés and its jack-up installation vessel Voltaire.

The project will be the first for RWE in the Netherlands. It is expected to be fully commissioned in early 2028. The companies are saying that it will become a model for the industry tackling the challenges of intermittent wind generation and flexible energy demand.

California’s San Luis Obispo Bay Being Evaluated for Wind O&M Port

San Luis Obispo Bay could be well suited to the needs of an O&M facility for offshore wind (CET)

Published Jul 25, 2024 7:54 PM by The Maritime Executive

 

California’s Port San Luis, a smaller central coast port used by commercial fishermen as well as recreational and tourist boating, is launching an exploration to become the first operations and maintenance (O&M) port for the planned California offshore wind industry. The Harbor District’s Board approved a port evaluation project working with Clean Energy Terminals, a company that was involved in O&M port planning including for the New Jersey Wind Port.

Port officials are citing recent studies and public feedback that suggest that larger offshore wind-related port facilities, such as the staging and integration ports under development to the north in Humboldt Bay or the south in Long Beach are not well-suited to the Central Coast. They are saying that instead smaller facilities such as O&M ports, which are typically no more than five acres, and support vessels that come into port approximately once every other week could be a good fit for the region. 

Further, the State of California’s Ports Readiness Plan released in July 2023 identified Port San Luis as a high-potential area for an O&M port facility. It is located close to Morro Bay the planned site for some of California’s offshore first wind turbines. It has a good natural harbor with a heritage of supporting the oil and gas industry.

California has set goals to deploy 2 to 5 GW of offshore wind by 2030 and 25 GW by 2045. As part of this, state officials have estimated that $11 to $12 billion is required to upgrade port facilities. Across the United States, estimates have said that as many as 100 port facilities will be required for the offshore wind industry.

Looking to tap into the potential for investment and long-term employment opportunities, the port and CET signed a project evaluation agreement which sets the groundwork for the two entities to jointly evaluate the technical and commercial feasibility of an offshore wind O&M port facility in San Luis Obispo Bay. Project evaluation is expected to take between six and 18 months, with development of an O&M facility taking six to eight years in total, subject to permitting and the timing of California's offshore wind projects.

"Today's announcement is Day 1 of a thoughtful and thorough evaluation of the feasibility of an O&M port in San Luis Obispo Bay, and if feasible, what a facility could look and feel like," said Port San Luis Harbor Commission President, Bob Vessely.

If an O&M facility is found to be feasible, the Agreement also sets out a pathway for parties to negotiate a lease option and subsequent long-term lease for the project's development and operations. They are hopeful that this project could lead to a long-term lease agreement starting a new industry in the region.

UK Launches Initiatives to Support 20 to 30 GW More of Offshore Wind Energy

Crown Estate has already provided for 36 wind farms and looks to expand offshore energy (Crown Estate)

Published Jul 25, 2024 4:11 PM by The Maritime Executive

 

 

The new Labor Government of Prime Minister Keir Starmer put forth an ambitious plan to use a public-private partnership and a newly launched government-owned energy company to accelerate offshore wind development in the UK. In a plan announced on Thursday, the government moved forward with one of the key elements of its election platform to use government resources to build out the clean energy industry.

The government put forth legislation in Parliament to form Great British Energy, which will be a government-owned energy company that will be charged with project development and investments. It will also contribute to local power working with local authorities, support the development of the supply chain, and explore working with Great British Nuclear. The initial investment will be funded by £8.3 billion (nearly $11 billion) from the government.

The second part of the plan calls for a partnership with the Crown Estate, an independent entity that manages the lands owned by the royal family as well as the seabed surrounding the UK. The Crown Estate already administers all the offshore leases, highlighting in its annual report released yesterday that 36 wind farms are operating across its marine holdings with a combined capacity of 11.8 GW, or enough power for 11 million homes. 

The UK is targeting 50 GW of offshore wind energy by the end of the decade with the Crown Estate reporting it is planning space for 20 to 30 GW off the coasts of England and Wales by 2030. In the past year, it has launched offshore leasing round five and accelerated round four. 

Offshore wind leasing was a key contributor to the Crown Estate’s net profit which was announced yesterday at $1.4 billion up nearly 150 percent from the prior year. Historically a quarter of the profit goes to the royal family, but in 2023 it was cut in half to 12 percent. It still will provide the royal family with nearly $60 million in the next year to pay for its official duties and households. The remainder of the profit goes to the government.

Officials of the Crown Estate said the new partnership with Great Britain Energy will drive greater investment into offshore energy and other green energy projects. As part of the proposal, the government is also changing the investment rules for the Crown Estate so that the new partnership can take a small stake in projects. This is designed to lessen the risk for private investment.

Another of the objectives is to accelerate the leasing and permitting process in the UK’s offshore wind sector. Reports highlight that it currently can take a decade to develop projects and begin production.

The new government has already announced that it would end a ban on further onshore wind projects and unblock the production of cheap solar energy. They predict the new partnership with the Crown Estate has the potential to leverage up to £60 ($US 77) billion of private investment into the energy sector.

The Crown Estate has a £16 ($20) billion portfolio of land and seabed. The new partnership is designed to support a further 20 to 30 GW of offshore wind energy development. The plan calls for this capacity to reach seabed leases by 2030.