U.S. to sell offshore leases for Northeast wind farms

Tue Jun 4, 2013 4:28pm EDT

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(Reuters) - The Department of Interior said Tuesday its Bureau of Ocean Energy Management (BOEM) will hold the first ever competitive lease sale for renewable energy in federal waters south of Rhode Island and Massachusetts on July 31.

The Interior Department said in a release BOEM will auction commercial wind energy leases to 164,750 acres located about 9.2 nautical miles south of Rhode Island.

BOEM said it will auction the area as two leases - the 97,500 acre North Lease and the 67,250 acre South Lease.

According to a report recently released by the Department of Energy's National Renewable Energy Laboratory, the North Lease has the potential for installed capacity of 1,955 megawatts (MW), and the South Lease, 1,440 MW.

Together, the Interior Department said these areas could support enough electricity to power more than 1 million homes.

BOEM will auction the lease areas simultaneously and said it will consider nonmonetary and monetary factors. Nonmonetary factors mentioned by the BOEM are whether a bidder holds a joint development agreement or a power purchase agreement.

Deepwater Wind has a joint development agreement with Rhode Island and wants to build two wind farms off Rhode Island. A 30-MW wind farm in state waters off Block Island, and a 1,000-MW wind farm in the federal waters covered by this auction.

The BOEM said the nonmonetary phase of the auction will begin on July 29 and the monetary phase on July 31.

BOEM said companies eligible to participate in the auction include wind power units of Deepwater Wind, Electricite de France SA, Energy Management Inc (which owns Cape Wind), Fishermen's Energy LLC, Iberdrola SA, Neptune Wind LLC, Sea Breeze Energy LLC, U.S. Mainstream Renewable Power (Offshore) Inc, and US Wind Inc.

The first federal lease to build a commercial wind farm went to Cape Wind in 2010 for its planned 468-MW project south of Cape Cod. Cape Wind said on its web site it is in the project financing phase and expects to start construction by the end of the year with part of the project entering service in 2015 and the rest in 2016.

Massachusetts units of National Grid Plc and Northeast Utilities have agreed to buy power from Cape Wind.

Separately, the Department of Interior this week also approved of three renewable energy projects in Arizona and Nevada capable of generating 520 MW.

Boulder Solar Power LLC's 350-MW Midland solar photovoltaic project and TerraGen Power LLC's 70-MW New York Canyon geothermal project are in Nevada, while SolarReserve LLC's 100-MW Quartzsite solar thermal project is in Arizona.

(Reporting by Scott DiSavino; Editing by Bernard Orr)

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