RWE wins bid to develop offshore wind in Gulf of Mexico, first-ever auction draws minimal interest
Offshore

RWE wins bid to develop offshore wind in Gulf of Mexico, first-ever auction draws minimal interest

UPDATED WITH FINAL RESULTS

RWE secured the right to develop an offshore wind project in the Gulf of Mexico during a lease auction on Aug. 29 that drew minimal interest from the industry.

The lease auction conducted by the Bureau of Ocean Energy Management lasted just two rounds and concluded less than two hours after it began. Two areas offshore Texas — Galveston I and Galveston II — did not receive any bids. RWE's winning bid of $5.6 million for the right to develop a third area, 102,480 acres offshore Lake Charles, Lousiana, was one of only three bids submitted during the auction.

If fully developed, the area offshore Lake Charles, Louisiana could support 1,244 MW of generating capacity and power 435,400 homes, BOEM said.

BOEM approved 15 entities to participate in the auction. The list featured offshore wind industry heavyweights, like Avangrid, Equinor, and RWE, which have participated in previous U.S. offshore wind auctions. Notable newcomers included Hanwha and Hanwha QCells USA, a manufacturer of solar modules.

Full list of companies participating in the Gulf of Mexico offshore wind lease auction:

  • 547 Energy LLC
  • Avangrid Renewables
  • Coastal Offshore Renewable Energy (newly-formed entity with unclear backers)
  • energyRe Offshore Wind Holdings, LLC
  • Equinor Wind US
  • Gulf Coast Offshore Wind (subsidiary of Dutch-based Repsol International Finance)
  • Gulf Wind Offshore LLC (newly-formed entity with unclear backers)
  • Hanwha Offshore North America LLC
  • Hanwha Q CELLS USA
  • Hecate Energy LLC
  • Invenergy GOM Offshore Wind LLC
  • RWE Offshore US Gulf, LLC
  • Shell New Energies US LLC
  • TotalEnergies Renewables USA, LLC
  • US Mainstream Renewable Power, Inc (majority-owned subsidiary of Aker Horizons. Aker Offshore Wind was integrated into Mainstream)

The Gulf of Mexico offshore wind auction was never expected to draw the same level of interest as previous auctions in the Northeast, in part due to shallower waters, low wind energy potential, and hurricane risks. It could also be tied to industry-wide headwinds, like inflation and interest rates, that have led to the dissolution of power purchase agreements for several of the country's first projects.

While the Gulf of Mexico auction lasted just shy of two hours, the New York Bight offshore wind lease auction spanned 64 rounds over multiple days, leading to $4.37 billion in winning bids.

The Business Network for Offshore Wind, a nonprofit advocacy group, released a report on the offshore wind potential in the Gulf of Mexico in the days leading up to the auction which predicted "somewhat lower" bids than previous auctions along the East Coast. But the group said lower bids could provide needed space for developers to maneuver and innovate.

Renewable Energy World will continue to update this story throughout the day.