The U.S. held its first wind auction for acreage in California, bringing in millions from European energy firms.
Key Details
- The U.S. held an auction for wind-development rights off the coast of California that brought in $757.1 million in bids.
- The auction was selling five leases that were priced at $2,028 per acre and were mainly purchased by European energy companies in an effort to establish ground in the U.S. wind industry.
- The companies were Denmark’s Copenhagen Infrastructure Partners, Norway’s Equinor ASA, Germany’s RWE AG, and Ocean Winds—a combined venture from France’s Engie and Portugal’s EDP Renewables.
Why it’s news
The U.S. has been working to bring renewable energy sources to the states by investing money into things such as solar panels and wind turbines.
The newest project was the U.S.’s first wind West Coast auction, where companies could bid on offshore wind development rights off the coast of California.
The auction successfully brought in $757.1 million in bids for the development of wind space. The auction was mainly overrun by European energy companies trying to establish a foothold in the U.S. wind industry.
The lease areas were equal to a combined 373,267 acres and were sold for $2,028 per acre, which was reasonable but lower than previous wind plots sold on the east coast. Previous offshore wind auctions have all been for the Atlantic shore and brought higher bids.
Some companies that participated in this recent auction also purchased plots off the Atlantic for around $9,000 an acre, much lower than the California price.
The lower prices were mainly due to the fact that this is still an emerging technology which can be risky as well as inflation causing rates to be much higher than when the other auctions took place.