Interior Department Auctions 344,000 Acres Offshore New Jersey for Wind Energy Development
In advance of COP21, renewable energy milestone continues to advance Administration’s clean energy goals, advances President’s Climate Action Plan
WASHINGTON – As part of President Obama’s comprehensive Climate Action Plan to create American jobs, develop domestic clean energy resources and cut carbon pollution, the Interior Department’s Bureau of Ocean Energy Management (BOEM) today held the nation’s fifth competitive lease sale for renewable energy in federal waters, which offered nearly 344,000 acres offshore New Jersey for potential wind energy development.
The provisional winners of today’s lease sale are RES America Developments Inc., which bid $880,715 for lease area OCS-A 0498 (160,480 acres), and US Wind Inc., which bid $1,006,240 for OCS-A 0499 (183,353 acres). Fishermen’s Energy LLC also participated in the lease sale.
According to an analysis prepared by the U.S. Department of Energy’s National Renewable Energy Laboratory, if fully developed, the area leased could support about 3,400 megawatts of commercial wind generation, enough electricity to power about 1.2 million homes.
“Today’s auction underscores the emerging market demand for renewable energy and marks another major step in standing up a sustainable offshore wind program for Atlantic coast communities,” said U.S. Secretary of the Interior Sally Jewell. “Through extensive outreach and public engagement, we reduced potential use conflicts while moving the country closer to harnessing the enormous potential of wind energy along the Atlantic coast.”
“We are pleased to see continued commercial interest in the offshore wind industry, as demonstrated by today’s lease sale. With provisional winners for both lease areas, we are optimistic about the promise of a strong renewable energy future offshore New Jersey, as well as for the entire nation,” said BOEM Director Abigail Ross Hopper. “I look forward to working with the members of the New Jersey Renewable Energy Task Force and the public on future wind energy projects proposed for these leases by RES America Developments Inc. and US Wind Inc.”
Prior to today’s lease sale, BOEM has awarded nine commercial offshore wind leases, including seven through the competitive lease sale process (two in an area offshore Rhode Island-Massachusetts, another two offshore Massachusetts, two offshore Maryland and one offshore Virginia). Today’s announcement builds on Interior’s work to support a sustainable offshore wind program through BOEM.
Efforts to spur responsible development of offshore wind energy are part of a series of Obama Administration actions to increase renewable energy both offshore and onshore, in coordination with state, local and federal partners. Most recently, the White House convened a summit about offshore wind, which brought together federal agencies, state leaders, offshore wind developers, environmental groups and others to discuss the path forward for offshore wind.
Also, in July, Secretary Jewell and Director Hopper joined Rhode Island officials to celebrate the start of construction on Deepwater Wind’s $225 million, 30-megawatt offshore wind project. The facility, which will provide electricity to Block Island and Rhode Island mainland consumers, required the Interior Department’s approval because part of its submerged transmission cable crosses federal waters.
The New Jersey Wind Energy Area starts about 7 nautical miles offshore and extends roughly 21 nautical miles seaward. To see a map of the New Jersey Wind Energy Area, visit www.boem.gov/New-Jersey.
Each lease will have a preliminary term of one year, during which the lessee will submit a Site Assessment Plan to BOEM for approval. A Site Assessment Plan describes the activities (installation of meteorological towers and buoys) a lessee plans to perform for the assessment of the wind resources and ocean conditions of its commercial lease area.
Once a Site Assessment Plan is approved, the lessee will have four and a half years to submit a Construction and Operations Plan (COP) to BOEM for approval. This plan provides detailed information for the construction and operation of a wind energy project on the lease.
Once BOEM receives a COP from a lessee, BOEM will conduct an environmental review of that proposed project. Public input will be an important part of BOEM’s review process. If the COP is approved, the lessee will have an operations term of 25 years.
DENMARK/GERMANY: The European Commission (EC) has approved the technical layout for the Krieger’s Flak interconnection between Germany and Denmark in the Baltic Sea.
The 400MW "combined grid solution" connection is being developed by transmission operators Energinet.dk in Denmark and 50Hertz in Germany. It will link the two countries’ national power grids via offshore wind projects. Two cables will be installed between substations at the 600MW Krieger’s Flak offshore project and the 288MW EnBW Baltic 2 site to establish the interconnector. Krieger’s Flak and Baltic 2 are located less than 30km apart. Frequency and voltage transformers will also be installed along the interconnector in order to match the power in the link to the one required by each country’s onshore grid network. 50Hertz CEO Boris Schucht said the EC approval of the plans "shows that cooperation between the European transmission system operators is the right answer to the challenges of the energy transition. With the Combined Grid Solution we create the nucleus for an offshore grid in the Baltic Sea, a milestone in the development of European grids".
In September 2014, the 600MW Krieger’s Flak offshore project wasdelayed for two years as the Danish government at the time was looking to renegotiate the tax-funded subsidies for offshore projects. The site is due to be completed in 2021. A tender to develop the project will be held in November 2016. The Krieger’s Flak interconnection will be completed by 2018, according to Energinet.dk, as the grid infrastructure is separate from the development of offshore wind projects.
Marine energy company Minesto, recently given a €13 million investment from the European Regional Development Fund through the Welsh Government, has announced that it received an additional €3.5 million from KIC InnoEnergy.
The funding is part of the overall development of the company. The collaboration was initiated in 2014 and has led to the largest single investment ever made by KIC IE in the field of ocean energy.
The funding is dedicated to ensure that the first commercial scale power plant is installed in 2017 in cooperation with partners McLaughlin & Harvey and KTH Royal Institute of Technology in Stockholm. Minesto secured a €13 million investment from the European Regional Development Fund through the Welsh Government earlier this year, hence it can become one of the first companies in the world to reach a commercial scale tidal array.
“KIC IE´s investment takes us one big step closer towards our vision of becoming one of the world leaders in marine energy,” said Anders Jansson, CEO of Minesto. “The funding from KIC IE helps us to offer a proven, demonstrated and innovative turn-key solution, applicable in a much wider range of European coastal waters with global export potential.”
“KIC InnoEnergy have decided to invest in the Deep Green technology developed by Minesto as it strongly complies with our vision to make Europe sustainable. Minesto has proven the technology and has a capable team to commercialise this step change product. We see Deep Green as one of the few marine energy converters that can be cost competitive in the short term. For us, it is a strategic investment and we look forward to promote and support the company Minesto to become a leading actor within the marine energy sector,“ said Mikel Lasa, CEO of KIC InnoEnergy Iberia.
Minesto’s tidal power plant, called Deep Green, resembles an underwater kite and is based on an innovative new approach for generating electricity from tidal and ocean currents. Deep Green has been producing electricity in the waters off Northern Ireland for more than two years.
Capital Dynamics, a global private asset manager, has announced that it has launched commercial operations of six onshore wind farm projects since the beginning of 2015. The projects, with total power generation capacity of 179.1 megawatts (“MW”), include five locations across the United Kingdom and one wind power generating facility in the United States.
Capital Dynamics, through its Clean Energy & Infrastructure (CEI) team, invests in, finances, owns and operates proven power generation technologies around the world. In its Global Clean Energy & Infrastructure Fund (the “Fund”), the team has acquired rights or invested in 1,464 MW of clean energy capacity in North America and the UK.
“Capital Dynamics is proud to have brought six onshore wind farm projects to commercial operation during the first half of 2015. Our partners in these projects, Pioneer Green Energy in Green Pastures and both Airvolution Energy and Futurespectrum across the UK projects, were critical to their success,” said John Breckenridge, Managing Director at Capital Dynamics and global leader of its CEI team, “These projects are all examples of our focus on mid-market, contracted power assets and bringing those from late stage development to commercial operation, in order to generate enhanced returns versus core infrastructure assets.”
Since the beginning of 2015, Capital Dynamics has launched commercial operations at its Garlenick, Daintree, East Youlstone and Tod Hill Wind Farms in the UK. Additionally, the Torrance Wind Farm project launched commercial operations at the end of May. Together, these five UK projects have clean power generation capacity of 29.1 MW, enough to power 16,296 homes according to Renewable UK.
Richard Mardon, CEO of Airvolution, commented, “We are pleased that Capital Dynamics has filled the financing gap left by the project finance banks at the small to medium end of the scale, they have been vital in enabling us to maximize the valuable wind power resource in the UK.”
Steve Ruggi, Director of Futurespectrum, said, “As renewable energy becomes increasingly part of the mainstream investment market, Capital Dynamics is out there in front, not only creating investment opportunities but actually helping make projects like ours happen, and that’s good for everyone.”
In the US, Capital Dynamics recently launched the first phase of commercial operations of its Green Pastures Wind Project (Green Pastures), in cooperation with Pioneer Green Energy, in North Texas generating 150 MW with 50 turbines in use. The second phase of Green Pastures is expected to launch later in 2015 and in total generate enough electricity to power 110,000 homes, according US Environmental Protection Agency methodology.
Greg Buis, President of Pioneer Green Energy, said, “We are excited about kicking off commercial operations of this large scale wind project in a growing wind energy market and pleased to have worked with Capital Dynamics to bring this project to fruition.”
MHI Vestas Offshore Wind A/S has been chosen as the preferred supplier for a 450-megawatt wind project off the coast of Germany.
MHI Vestas will disclose further details about Dong Energy A/S’s Borkum Riffgrund 2 wind farm, “as soon as the project translates into a firm and unconditional order,” the company reported in a statement on Wednesday.
Denmark’s Dong Energy said in a separate statement on its website that it expects to sign an agreement with MHI Vestas later this year, conditional on it making a final investment decision on the project.
Japan’s Mitsubishi Heavy Industries Ltd. and Denmark-based Vestas Wind Systems A/S began the MHI Vestas venture in April 2014.
MHI Vestas is targeting about 100 billion yen ($813 million) in sales by fiscal 2018, from about 40 billion yen in 2014, according to a statement distributed at a Tokyo briefing by Mitsubishi Heavy earlier this week. The 2014 figure includes back-orders from Vestas when it was a standalone company.
Last month, MHI Vestas was picked as the preferred supplier for the Navitus Bay project off the U.K. for as much as 970 megawatts of wind turbines. The company has already won offshore U.K. orders, for 400 megawatts for the Rampion project in May and the company’s first order for 258 megawatts for the Burbo Bank Extension project in December, according to the company’s website.
Vestas Wind Systems A/S, the world’s largest turbine maker, agreed to supply equipment with 149 megawatts of capacity for a project in Mexico.
The 45 3.3-megawatt turbines will be delivered in the first quarter of 2016, the Aarhus, Denmark-based manufacturer said Friday in a statement on its website. The sale includes a 10-year service agreement. The wind farm is receiving loans from the Overseas Private Investment Corporation and the North American Development Bank. Terms weren’t disclosed.
Oak Creek Energy Systems Inc. will develop and operate the Tres Mesas project. Sigma Alimentos, a unit of Alfa SAB, and Wal-Mart Stores Inc.’s Mexico unit have agreed to buy the electricity that’s generated.
BlackRock Inc., the world’s largest money manager, is buying a 90 percent stake in 80 megawatts of Iowa wind capacity to help diversify its infrastructure fund.
BlackRock is acquiring interests in the 42.5-megawatt Elk and 37.5-megawatt Hawkeye wind farms from RPM Access LLC for an undisclosed sum. The Central Iowa Power Cooperative buys electricity from the power plants, which came online in 2011 and 2012, under a long-term contract.
“We’re specifically looking for things that get our portfolio diversified geographically,” Managing Director David Giordano said in a phone interview. “Iowa has been a state that’s had a lot of great penetration, but a lot of it’s operating projects with not a lot of new projects getting done right now. So this was just a great opportunity for us.
”The Elk and Hawkeye wind farms use 32 2.5-megawatt Nordex SE turbines that have been deployed in projects outside the U.S. where BlackRock’s invested, Giordano said. Familiarity with the technology and the long-term power-purchase agreement made the projects attractive additions as the firm beefs up its $1.5 billion infrastructure fund.
“We’ll stay very active through 2015 and into 2016,” Giordano said. “BlackRock has a number of places where these types of investments make sense.”