Federal auction will sell leases for ocean wind farms off Wilmington
The federal government will auction leases Wednesday for two potential wind farms in the Atlantic Ocean off Wilmington. Someday they could power a half-million homes, but there are still years of work before that happens.
It's the second sale this year for wind areas off the East Coast. A similar auction off New York and New Jersey in February brought in a stunning $4.37 billion dollars for six leases. If the North Carolina leases go for similar prices, it would total more than $900 million.
But development is complex and it could be a decade before electricity is flowing.
"I think that a lot of folks are going to see a winner and start to say, 'Oh, we're gonna get offshore wind.' … There are still years of permitting steps to go through," said Katharine Kollins, president of the Southeastern Wind Coalition.
Most of the 16 approved bidders are from Europe, where offshore wind is already a big industry. Others are U.S. wind developers, oil companies, and Avangrid Renewables, which is also developing a wind farm off Kitty Hawk. (Avangrid paid just $9 million for its lease in 2017. Its construction plan calls for up to 69 wind turbines.)
Charlotte-based Duke Energy plans to bid, according to chief financial officer Steve Young, who says wind is part of the company's long-range plan to eliminate fossil fuels.
"We have pre-qualified as a bidder and we will bid," Young said.
The auction is expected to take a couple of days. Winning bidders will have until July 1 to sign leases to beat an impending 10-year offshore wind ban ordered by former President Trump.
Duke is expected to submit a proposed carbon-reduction plan to the North Carolina Utilities Commission on May 16. Young and other Duke Energy officials have said the plan will include multiple scenarios for meeting the goal of reaching net-zero carbon electricity by 2050.
"We need to look at all the available types of resources and layout scenarios. The commission will ultimately make the selection on what our carbon reduction path is. But we want to make sure that they have before them a range of options, and offshore wind as part of that," Young said.
Even if it doesn't win this week's wind lease auction, Duke Energy is the most likely buyer for the electricity, Kollins said. And there's another wrinkle: With the exception of a portion of new solar farms, last year's North Carolina energy reform requires Duke Energy to own all new generating facilities.
Regis Repko, Duke Energy's senior vice president of generation and transmission strategy, said that would mean additional complex negotiations.
"We would have to look for an arrangement that would meet the legislation's definition of utility ownership," Repko said. "We would have to work out some kind of arrangement that would be considered our ownership."
That could mean business partnerships between Duke Energy and any winning bidder, he said.
Some North Carolina coastal residents have expressed concern about visual pollution from offshore wind farms. They want the wind farm pushed farther out to sea.
Renderings produced the Southeastern Wind Coalition show that wind turbines would be fairly small on the horizon.
Eligible bidders for Wilmington offshore wind leases
The Bureau of Ocean Energy Management published this list of eligible bidders for the Carolina Long Bay/Wilmington East leases:
- 547 Energy LLC
- Arevia Power LLC
- Avangrid Renewables
- BP US Offshore Wind Energy LLC
- Invenergy Long Bay Offshore LLC
- Carolina Offshore Wind LLC
- Duke Energy Renewables Wind LLC
- EDF Renewables Development Inc.
- JERA Renewables NA LLC
- Masdar Offshore Wind Americas LLC
- MRP Offshore Wind Farm LLC
- Orsted North America Inc.
- OW North America Ventures LLC
- RWE Offshore Wind Holdings LLC
- Shell New Energies US LLC
- TotalEnergies Renewables USA LLC