U.S. kicks off first California coast offshore wind auction

(Reuters) – The United States on Tuesday is set to kick off the first sale of offshore wind development rights for waters off the coast of California, expanding the nascent domestic industry to the Pacific Ocean.

The auction is a major milestone in the Biden administration’s push to put wind turbines along every U.S. coastline as part of its climate change agenda.

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

The sale also puts the United States, which has lagged Europe in development of offshore wind farms, at the forefront of the expansion of floating turbines, an emerging technology needed when the depth of the ocean precludes the use of standard, fixed equipment.

“It puts California on a path to be a global hub for offshore wind technology,” JC Sandberg, interim chief executive of the American Clean Power Association, said on a call with reporters.

Interior’s Bureau of Ocean Energy Management (BOEM) will auction 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.

The auction will begin at 7 a.m. local time (1500 GMT) and can be viewed live on BOEM’s web site.

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