Maine offshore wind auction draws a few takers

(The Center Square) — Two companies have won development rights to construct floating offshore wind turbines off Maine's coastline, but lackluster interest in the bids highlights the impact of inflation and other economic challenges that have slowed the industry.

On Tuesday, the Bureau of Ocean Energy Management announced that the federal government's "first-ever" wind energy lease sale resulted in nearly $22 million in lease payments for four parcels off the coast of Maine and Massachusetts.

Connecticut-based Avangrid Renewables submitted winning bids of $4.9 million and $6.2 million for two parcels about 30 miles off the coast of Cape Cod in Massachusetts. In comparison, Invenergy NE Offshore Wind won a $4.9 million bid to develop wind energy more than 46 miles off Maine's coastline and another project off Cape Cod for $5.8 million. Combined, the companies leased nearly 440,000 acres of federal waters.

However, only half of the areas offered for lease by the federal agency were bid on, far less than offshore wind leases in previous rounds. In 2022, developers bid $4.37 billion on six lease parcels off the coast of New York and another $757 million on areas off California's shores, according to agency data.

Despite the lackluster interest, Dan Burgess, director of the Governor's Energy Office in Maine, called the lease sale a "significant milestone" for Maine as it seeks to develop offshore wind to reduce dependence on fossil fuels and address climate change.

"We look forward to following the next phases of these lease sales and building on our progress to foster this industry for the benefit of Maine people," Burgess said in a statement.

Maine wants to pursue offshore wind to help meet its ambitious goal of reaching 80% renewable energy by 2030 and 100% by 2050 while reducing the state's greenhouse gas emissions.

The state is also part of the Power Up New England initiative — a collaboration with Connecticut, Massachusetts, New Hampshire, Rhode Island and Vermont and several utilities — which calls for expanding and upgrading interconnection points for undersea cables that will eventually bring power from offshore wind turbines to the regional grid.

Last week, Maine learned that its application for $456 million in federal funding to defray the state's cost of developing a "wind port" on Sears Island wasn't on the list of recipients to receive grants from the Bipartisan Infrastructure Law for clean energy and transportation projects.

Overall, the nation's nascent offshore wind industry faces increasing turbulence, with developers scaling back or backing out of projects, citing supply chain disruptions, higher construction costs and a lack of state and federal government tax credits.

The shift to wind power also faces opposition from commercial fishermen and conservation groups who argue that towering turbines off the Atlantic coastline will hurt marine life, fishing and tourism industries and the local economy.

In 2021, Gov. Janet Mills signed a bill setting a permanent ban on offshore wind development in waters managed by the state aimed at lessening the impact on the state's multibillion-dollar lobster industry. Mills and members of the state's congressional delegation have also pressured the Biden administration not to pursue offshore wind projects in fertile fishing grounds off Maine's coast.