Deepwater eyes fed. lease prize in summer auction

By Patrick Anderson
PBN Staff Writer

As Deepwater Wind LLC fights to install five wind turbines off Block Island, a much bigger contest to harness the wind in southern New England waters is about to begin in earnest. More

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FOCUS: ENERGY & THE ENVIRONMENT

Deepwater eyes fed. lease prize in summer auction

By Patrick Anderson
PBN Staff Writer

Posted 5/27/13

As Deepwater Wind LLC fights to install five wind turbines off Block Island, a much bigger contest to harness the wind in southern New England waters is about to begin in earnest.

This summer, the U.S. Bureau of Ocean Energy Management, federal gatekeeper of the nation’s offshore power resources, is slated to auction wind-development rights for 257 square miles of Atlantic Ocean south of Rhode Island and Massachusetts.

Located in a windy area close enough to population centers and large enough to host up to 200 turbines, the Rhode Island-Massachusetts federal lease is Deepwater’s ultimate goal in the region, the motivator behind the five-turbine Block Island “demonstration project” and partnership the company has struck with the state as its preferred wind developer.

Deepwater pledged $3.2 million to assist Rhode Island in the creation of its marine-zoning Ocean Special Area Management Plan and has signed a lease with the Quonset Business Park to base its construction and staging operation there.

But how much Deepwater’s investment in Rhode Island will mean to the federal government is unclear.

Terms of the auction, including the rules the government will use to judge each bid, and which of the companies seeking a lease will be eligible, are going to be set in a final sale notice next month. Those rules have drawn attention from Rhode Island leaders who back Providence-based Deepwater and are concerned that another company will win the development rights at auction.

In addition to Deepwater, eight other energy companies have registered with the Bureau of Ocean Energy Management to participate in the auction for the Rhode Island-Massachusetts offshore wind-energy site, one of six sites in federal waters around the country identified for wind-development leases.

The Bureau of Ocean Energy Management auction rules published in December would give a 15 percent credit to companies with a Joint Development Agreement with a state.

Companies that have reached a deal with an electric utility to sell the energy produced by the wind farm get a 25 percent credit in the auction scoring system, in which the cash offered up by the bidder is the biggest factor in the decision.

Deepwater’s agreement with Rhode Island is the only one held by any of the companies seeking the federal lease and none of the others is expected to reach a power-purchase agreement before the auction.

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