U.S. to hold record offshore wind auction next month in clean energy push

© Reuters. FILE PHOTO: A wind farm shares space with corn fields the day before the Iowa caucuses, where agriculture and clean energy are key issues, in Latimer, Iowa, U.S. February 2, 2020. REUTERS/Jonathan Ernst

By Nichola Groom

(Reuters) -President Joe Biden's administration on Wednesday said it would hold the U.S. government's biggest ever offshore wind auction next month for areas in waters off the coast of New York and New Jersey, part of a range of measures it unveiled to speed growth of clean energy.

"We're at an inflection point for domestic offshore wind energy development," Interior Secretary Deb Haaland said on a call with reporters. "We must seize this moment."

The announcement, which seeks to advance Biden's ambitious climate change agenda, comes as sweeping legislation to support those goals is stalled in Congress. Biden has pledged an "all-of-government" approach to fight global warming and decarbonize the U.S. electricity grid by 2035.

The White House is "continuing to pursue this agenda every way we know how," a senior administration official told reporters on a briefing call on Tuesday.

In a wide-ranging memo, the administration unveiled actions by seven federal agencies designed to accelerate deployment of wind and solar projects while creating well-paying jobs, a cornerstone of Biden's presidential campaign pledge.

The centerpiece of the announcement is the Feb. 23 sale of six commercial leases in the New York Bight, shallow waters between New York's Long Island and New Jersey. The leases are projected to one day host projects able to generate up to 7 gigawatts of electricity, enough to power 2 million homes, the administration said.

It would be the first offshore wind auction under Biden, who last year launched an aggressive push to install 30 gigawatts of the technology by 2030 and approved the nation's first two commercial-scale projects. The last government auction for wind leases was held in 2018.

The Bureau of Ocean Energy Management said 25 companies are eligible to bid on the leases, including entities controlled by Equinor, Avangrid (NYSE:AGR), BP (NYSE:BP) and EDF (PA:EDF), and each bidder may only win one lease.

The 488,201 acres that will be offered to offshore wind developers was reduced by 22% from the initial sale proposal outlined last summer in response to input from the commercial fishing industry, U.S. Coast Guard and others, BOEM said.

Developers will be required to "make every reasonable effort" to use union labor to build their projects and to outline plans for supporting creation of a domestic supply chain for the industry. Companies that succeed in sourcing major components domestically may be eligible for lower lease operating fees.

Onshore, the administration announced steps to slash the time it takes to permit clean energy projects on public lands through better coordination between five agencies and the creation of renewable energy coordination offices at the Department of Interior.

It also unveiled a major federal effort to build thousands of miles of electric transmission lines to carry clean energy from solar and wind facilities to U.S. communities. The Building a Better Grid initiative will tap billions of dollars in funding from the $1 trillion infrastructure law passed in November to finance new lines and grid upgrades.

The administration said it would ensure that the benefits of clean energy investment will reach rural communities through a new $10 million grant program at the Agriculture Department to support projects in poor areas.