Tag: Offshore Wind

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Avangrid Wins Latest BOEM Auction for Offshore North Carolina Lease and Moves Towards Full Commercial Lease
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Developers Submit Unsolicited Requests for Wind Leases Offshore Massachusetts and New York
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New Bill Planned for the Development and Funding of Offshore Wind Energy in Germany
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BOEM Defines Wind Energy Areas Offshore North Carolina
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Upcoming Event: Investing in Renewable Energy 2.0

Avangrid Wins Latest BOEM Auction for Offshore North Carolina Lease and Moves Towards Full Commercial Lease

By Stanford D. Baird, Joseph D. Condo, Ankur K. Tohan, David L. Wochner, Michael L. O’Neill

Following an auction on March 16, 2017, the U.S. Department of the Interior’s Bureau of Ocean Energy Management (BOEM) named Avangrid Renewables, LLC (Avangrid) the provisional winner of the auction.  Avangrid, majority owned by global energy firm Iberdrola, S.A., outbid three other auction participants to secure rights to a 122,405-acre area off the coast of Kitty Hawk, North Carolina.  Avangrid and BOEM will now work to finalize the provisional lease and continue to develop the project.

BOEM has not scheduled any other lease auctions for offshore wind projects on the Outer Continental Shelf.  However, as this month’s unsolicited bids for offshore Massachusetts and New York demonstrate, businesses remain interested in developing offshore wind projects with or without an open lease application solicitation.  Therefore, in addition to submitting unsolicited lease applications, there is an opportunity to advocate at the federal level with the Trump Administration and BOEM to continue the leasing program on the Outer Continental Shelf and to continue advocating for state-level incentives for offshore wind projects.

The Auction Process and the Winning Bid
Following years of preparation, BOEM announced its plans to hold the North Carolina Outer Continental Shelf lease in January 2017.  Nine bidders pre-qualified as “eligible bidders” under BOEM’s auction rules.  Four companies participated in the March 16 auction:

  • Avangrid
  • Statoil Wind US LLC
  • Wind Future LLC
  • wpd offshore Alpha LLC (wpd offshore)

The bidding lasted 17 rounds, with Avangrid and wpd offshore both bidding more than $8 million in the 16th round.  Avangrid’s 17th round bid of $9,066,650 successfully secured the provisional win for Avangrid.

Next Steps for the North Carolina Lease and Beyond
Part 585 of the Code of Federal Regulations lays out the next steps for finalizing the lease for the offshore North Carolina block.  First, the U.S. Department of Justice and the Federal Trade Commission will review BOEM’s auction process.  Then Avangrid must execute the lease, file financial assurance, and pay the balance of the “bonus bid” (the difference between the winning bid and the applicable bid deposit) within 10 days of receiving the lease documents.

Once the lease is finalized, Avangrid will have one year to submit its Site Assessment Plan (SAP) to BOEM.  The SAP describes the initial activities the leaseholder will undertake to evaluate the lease site (federal guidance available here).  If approved, BOEM’s regulations allow Avangrid five years to develop and submit a Construction and Operations Plan for BOEM’s approval, although the plan must be filed at least six months prior to the end of this five-year period.  A Construction and Operations Plan outlines the facilities that the leaseholder plans to construct and use for its project, as well as construction activities, commercial operations, and decommissioning plans (additional federal guidance here).   Once the Construction and Operations Plan is filed, BOEM will evaluate the potential environmental impacts of the proposed project and reasonable alternatives, as well as solicit public comment.  If BOEM approves the Construction and Operations Plan, Avangrid would have a 25-year commercial lease term with the possibility of renewal.

More broadly, the North Carolina offshore wind lease auction was the last pending open auction.  BOEM has evaluated potential commercial leasing and received indications of commercial interest in other Outer Continental Shelf areas, such as offshore California, Hawaii, and South Carolina, but the agency has not set a timetable for announcing any further competitive lease auctions.  In the absence of an open auction, interested parties may submit unsolicited lease applications in accordance with 30 C.F.R. § 585.230.

There is also an opportunity to advocate for additional competitive Outer Continental Shelf lease auctions with the Trump Administration.  President Donald Trump’s “America First: A Budget Blueprint to Make America Great Again” proposes a 12 percent cut to the Department of the Interior’s budget, suggesting that agencies like BOEM within the Department may be de-emphasized under the new Trump Administration.  In contrast, Secretary of the Interior Ryan Zinke called the results of last week’s North Carolina auction a “big win for collaborative efforts with state, local, and private sector partners,” so the Trump Administration, as well as legislators in Congress, may be disposed to support continued offshore wind development as this year’s federal budget debate unfolds.

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Developers Submit Unsolicited Requests for Wind Leases Offshore Massachusetts and New York

By Stanford D. Baird, Joseph D. Condo, Ankur K. Tohan, David L. Wochner, and Michael L. O’Neill

On March 10, 2017, the U.S. Department of Interior’s Bureau of Ocean Energy Management (BOEM) posted four unsolicited applications for wind project leases on the Outer Continental Shelf.  PNE Wind U.S.A., Inc. has filed three lease applications, two for offshore Massachusetts and one for offshore New York.   Separately, Statoil Wind US LLC filed a lease application for offshore Massachusetts.

The developers’ lease requests, particularly the overlapping requests for offshore Massachusetts, indicate continued interest and growing competition in the U.S. offshore wind sector.  The quickening pace of activity in the U.S. offshore wind market, including completion of Deepwater Wind’s Block Island offshore wind farm and today’s auction process for offshore North Carolina, suggests that offshore wind projects may become a more important part of the U.S. power generation portfolio in the coming years.  In addition, the unsolicited application for offshore New York and the federal government’s response may provide an early indication as to the Trump Administration’s position on offshore wind development going forward.  Increased activity and a new administration in the White House present opportunities to engage on this issue and shape the policies that will govern the federal offshore leasing program for the next four or eight years, or beyond. Read More

New Bill Planned for the Development and Funding of Offshore Wind Energy in Germany

By Christoph Mank

An introduction of bidding processes for determining the amount of funding for the generation of electricity from onshore wind turbines, offshore wind turbines and large photovoltaic systems is planned with an amendment of the German Renewable Energy Act (Erneuerbare-Energien-Gesetz).

The German government sees the transition to bidding processes as being a central instrument for attaining the goals laid down by policy makers regarding the development of the share of renewable energies in the production of electricity. The political goal is to increase the share of renewables in the amount of electricity generated to between 40% and 45% by 2025, between 55% and 60% by 2035 and at least 80% by 2050. In real terms the increase in the contribution of renewable energy to the electricity production in Germany has gone from 25.3% in 2013 to 28% in 2014 and 32.6% in 2015. It is the political will of the current government not to fall below or exceed this established scope for expansion. For this purpose the aim is to fix the tendered quantities at a level that is as accurate as possible on the one hand; on the other hand, a high realisation rate needs to be achieved with regard to the projects awarded in the context of the bidding process.

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BOEM Defines Wind Energy Areas Offshore North Carolina

On Monday, the U.S. Department of the Interior announced that the Bureau of Ocean Energy Management (“BOEM”) has defined three Wind Energy Areas off the North Carolina coast for potential commercial wind energy development.

The three Wind Energy Areas cover approximately 307,590 acres, which is a reduction in the area initially considered by BOEM for commercial scale wind power development. The Wind Energy Areas announced Monday include about 122,405 acres off the coast of Kitty Hawk, North Carolina, and two areas of 51,595 acres and 133,590 acres off the coast of Wilmington, North Carolina. A map of the Wind Energy Areas can be found here.

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Upcoming Event: Investing in Renewable Energy 2.0

On May 15, 2014, K&L Gates will host its annual event on investment in renewable energy in its Frankfurt office. The event is co-sponsored by Grontmij and Alexa Capital.

The program will address recent developments that shape the environment of investment in renewable energy, focusing on investment in the UK while also covering German and European trends.

As in previous years, the program will combine legal and commercial perspectives, and presents speakers with professional backgrounds in project development, M&A, finance and law, all widely experienced in the renewable energy sector.

This year, program and speakers include:

  • The Development of the Yield Co: implications for investing in renewables and energy

Gerard Reid, Partner, Alexa Capital

  • UK Energy Market Reform: what it means for investors

Anthony Fine, Partner, K&L Gates, London

Paul Tetlow, Partner, K&L Gates, London

  • UK Power Grids: opportunities and solutions for renewable energy industry

Vijay Shinde, Head of UK Grid Services, Grontmij, Newcastle

  • Power Purchase Agreements (PPAs): the growing need and what it means for renewable investors

Dr. Felix Grolman, CEO, Grundgrün Energie GmbH

  • The Future of Offshore Wind

Ian Nolan, Chief Investment Officer, Green Investment Bank 

  • Yield Cos: strategies to lower the cost of capital

Mark Henderson, Partner, Greencoat Capital

Nick Boyle, CEO, Lightsource 

  • Development Companies: entering and operating in the UK

Thomas Kercher, CEO, PFALZSOLAR GmbH

Oliver Christof & Constantin Windisch-Graetz, Christof AG

  • Renewable Energy 2.0: what it means for all of us

Anthony Fine, K&L Gates (Chair)

Vijay Shinde, Grontmij

Gerard Reid, Alexa Capital

Felix Groelman, Grundgrün Energie GmbH

Mark Henderson, Greencoat Capital

Nick Boyle, Lightsource

For more information: click here.

For registration: click here.

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