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United States

Deepwater Wind slams US lease auctions

Developer says process is "fatally flawed"

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Developer Deepwater Wind has delivered biting criticism of the US offshore wind lease auctions, and has described the proposed auction process as "fatally flawed".

Several developers, politicians and advocacy groups have raised concerns about the financial viability and potential environmental impacts of the lease auctions. They filed comments in response to the proposed sales notices for the Virginia and Rhode Island/Massachusetts wind energy areas (WEAs), published by the Bureau of Ocean Energy Management in December.

Deepwater Wind said the auction model leaves little room for state governments to participate, even though they control the most difficult aspect of wind farm development: approval for power purchase agreements (PPAs).

The proposed auction method requires developers to pay large up-front fees, Deepwater said, followed by site assessments and annual rent for those that win leases. No developer will be able to pay these costs, because none of the proposed projects has a PPA, Deepwater argued.

In its comment, Fishermen’s Energy said the auction lots are too large, which risks preventing development or creating a higher electricity price than would prevail in a more competitive market. It criticised the proposed operating fee structure for introducing financial difficulties and undue risk. It also said the proposed timeline is too tight.

Several non-profits, including Oceana, the National Resources Defense Council, National Wildlife Federation, Conservation Law Foundation and Southern Environmental Law Center, expressed concern over the fate of the endangered right whale.

Oceana said parts of the development area should be excluded. The NWF, CLF and NRDC are asking for mitigation measures similar to those they have already agreed with some developers for their potential projects in four WEAs and for Deepwater’s 30MW Block Island development in Rhode Island Sound.

The National Park Service expressed worries about the cumulative environmental impact of the Massachusetts/Rhode Island WEA, the separate Massachusetts WEA, and Block Island.


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