Bids soar at first-ever California offshore wind auction

The auction is a major milestone in the Biden administration’s push to put wind turbines along every U.S. coastline to help decarbonize the electricity sector and fight climate change.

It puts the United States, which has lagged Europe in the development of offshore wind farms, at the forefront of the expansion of floating turbines, an emerging technology needed when ocean depths preclude the use of standard, fixed equipment.

After 19 rounds of bidding, combined live bids for the five leases stood at $387.1 million, with bids on one central California lease topping $100 million. The sale is expected to last two days.

Projects developed on the leases could one day power 1.5 million homes combined, according to the Department of Interior. They are a key part of California’s efforts to wean its power sector off fossil fuels by 2045.

Interior’s Bureau of Ocean Energy Management (BOEM) is auctioning five lease areas equal to a combined 373,267 acres (151,056 hectares) off the state’s north and central coasts.

Previous federal offshore wind auctions have all been for leases in shallower waters of the Atlantic Ocean. BOEM held two auctions earlier this year, including one that drew a record $4.37 billion in high bids, mainly from European energy companies, for development rights off New York and New Jersey.

The California sale is viewed as a test of industry appetite for investing in floating offshore wind technology, which to date has been limited to small pilot projects in places, including Norway and Portugal.

Companies approved to bid at the auction include established offshore wind players like Avangrid Inc (AGR.N), Orsted (ORSTED.CO) and Equinor (EQNR.OL), which are all developing projects on the U.S. East Coast.

But the list of 43 potential bidders also includes local entities such as California developer Castle Wind and the Redwood Coast Energy Authority, a government agency in northern Humboldt County.