Maryland offshore lease auction set

The US government on 19 August will hold a competitive commercial wind energy lease auction for two areas off Maryland’s coast and has qualified 16 developers to participate, the Interior Department (DOI) announces.

The auction will be the third along the US Atlantic seaboard after successful lease sales last year involving tracts off Massachusetts-Rhode Island and Virginia.

The Bureau of Ocean Energy Management (BOEM), part of DOI, expects to hold additional competitive auctions for areas off Massachusetts and New Jersey in the coming year. 

The 79,707 acre (322.5sq km) Maryland Wind Energy Area, located between 18.5km and 42.5km from Ocean City, will be auctioned as two leases: a 132.5sq km North Lease Area and a 190sq km South Lease Area.

Each lease area contains five whole blocks and some partial ones.

If fully developed, the Wind Energy Area could support between 850MW and 1.45GW of wind generation capacity, enough electricity for 300,000 homes, according to the US National Renewable Energy Laboratory.

The sale will be held using an online bidding system. The Bureau of Ocean Energy Management (BOEM), part of DOI, will auction the two areas simultaneously.

The 16 qualified companies are: Apex Offshore Maryland; Bluewater Wind Maryland; Convalt Energy; Dominion; EDF Renewable Energy; Energy Management, Inc.; Fishermen’s Energy; Green Sail Energy; Iberdrola Renewables; Maryland Offshore Wind; Orisol Energy US; RES America Developments; SCS Maryland Energy; Sea Breeze Energy; Seawind Renewable Energy Corporation and US Wind.

"Maryland is a leading force for building a clean and sustainable energy future,” says Interior Secretary Sally Jewell.

Earlier this year, Maryland Governor Martin O’Malley signed a bill into law that provides a 20-year taxpayer subsidy for development of a 210MW offshore wind farm.

Under the law, household electric rates will increase up to an estimated $1.50 per month with most businesses paying a 1.5% monthly surcharge on their bills. The rate hikes would not take effect until after the wind farm is operational, which O’Malley’s administration hopes will be in 2018.

Maryland already requires that 20% of its electricity come from renewable sources by 2022. The law creates a carve-out within the RPS for offshore wind.

The law also creates offshore wind renewable energy credits, or ORECs, that will be awarded to offshore wind farm operators on a megawatt-hour production basis.  It obligates the state’s investor-owned electric utilities to purchase both the project’s electricity and ORECs, which they can use to help meet RPS compliance.

Project investors would need to show that any wind farm would generate a net economic benefit for Maryland.

The state Public Service Commission will launch and supervise the program.