Subsidiaries of Equinor and Dominion Energy were the provisional winners in the Aug. 14 U.S. offshore wind lease sale, which brought in nearly $93 million for two lease areas in the Central Atlantic.

The lease sale, which gives the companies the right to submit offshore wind project plans for acreage offshore Delaware, Maryland and Virginia, marked the first sale in the region in a decade, according to the U.S. Bureau of Ocean Energy Management (BOEM). Combined, the lease areas have the potential to power up to 2.2 million homes with clean energy by BOEM’s estimates. That would require up to 6.3 gigawatts (GW) of wind power.

“At the start of the [Biden] administration, our nation had approved zero offshore wind energy projects. Today, we have nine—enough to power nearly 5 million homes,” said U.S. Interior Secretary Deb Haaland. “This is what developing a clean energy transition looks like.”

The sale marks another milestone toward the Biden-Harris administration’s goal of deploying 30 GW of offshore wind capacity by 2030. So far, the U.S. has approved more than 13 GW of offshore wind projects.

Offshore wind is seen as a key cog in the administration’s plans to add more renewable energy to U.S. electric grids in an effort to help lower greenhouse-gas emissions. Following a rough 2023—marked by high interest rates, supply chain issues and inflation that led to some project delays and cancellations—offshore wind developers are moving projects forward with support from regulators.

The latest lease sale, however, brought in less in high bids compared to other offshore wind sales.

The New York Bight offshore wind auction for six leases in February 2022 drew competitive winning bids from six companies totaling nearly $4.4 billion in bids. In the same year the Carolina Long Bay Offshore Wind lease sale for two leases brought in $315 million in total winning bids. Last year, the first Gulf of Mexico offshore lease sale drew only one winning bid for $5.6 billion.

Of the 17 companies that qualified to place bids in the Aug. 14 sale, six companies participated.

Equinor Wind US LLC was named the provisional winner for Lease OCS-A 0557 with its bid of about $75 million. The lease area, which spans more than 101,000 acres and is about 26 nautical miles (nm) from Delaware Bay, received the most interest from companies participating in the bid.

With its bid of about $17.7 million, Dominion Energy’s Virginia Electric and Power Co. provisionally won Lease OCS-A 0558. The 176,505-acre lease area is about 35 nm from the entrance of Chesapeake Bay.

Next steps

 Equinor said it will work with BOEM to certify the lease, which has capacity to potentially produce about 2 GW of energy. The company plans to add the fixed-bottom wind lease area to its portfolio following regulatory approvals.

“This is a long-term option with first power post 2035. Developing this lease area will draw upon Equinor’s proven capabilities in offshore wind,” Pål Eitrheim, executive vice president of Equinor Renewables, said in a news release. “We will take a disciplined approach to minimize risk and mature a robust project in our portfolio.”

Elsewhere in the U.S., Equinor is developing the two-part 2.1 GW Empire Wind project offshore New York as well as the South Brooklyn Marine Terminal, which will become New York’s first offshore wind hub. When complete, Empire Wind will feature up to 130 wind turbines and be capable of providing enough electricity to power 1 million New York homes.

The Central Atlantic lease area won by Dominion Energy’s Virginia Electric and Power Co. positions the company for more growth offshore Virginia. The lease area, which BOEM said has a potential capacity between 2.1 GW and 4 GW, is adjacent to the site of the Dominion’s 2.6-GW Coastal Virginia Offshore Wind project, which is currently under construction. The company also agreed to acquire Avangrid’s nearby 40,000-acre Kitty Hawk Wind North project, which it plans to rename CVOW South.

“Offshore wind is critical to our all-of-the-above approach to meet the unprecedented growth of our customer electric demand over the next decade,” said Dominion Energy CEO Robert M. Blue. “Winning this lease area gives us another low-cost option to meet that growing demand while providing our customers with reliable, affordable and increasing clean energy.”

Despite the progress, more needs to be done to maintain the momentum, according to Erik Milito, president of the National Ocean Industries Association. In a statement released following the Aug. 14 offshore wind sale, Milito pointed out that after December, the Interior Department can’t hold more offshore wind lease sales until another offshore oil and gas sale takes place.

No offshore oil and gas lease sales are scheduled for 2024.

“This will be the first year without a federal offshore oil and gas lease sale since 1958. … The current leasing reality is begging for a Congressional fix to provide much-needed regulatory certainty and normalcy for both offshore oil and gas and wind lease sales,” Milito said.

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