BOSTON — The Department of the Interior trumpeted it Friday as a "Bidding Bonanza" for the Trump administration: A lease auction of about 390,000 acres off the coast of Massachusetts for the development of offshore wind energy drew a record $405 million in winning bids.
If fully developed, the three parcels could generate about 4.1 gigawatts of energy — enough to power nearly 1.5 million homes.
Interior Secretary Ryan Zinke said the auction was the nation's eighth competitive lease sale for the development of offshore wind. He said it smashed the previous highest grossing offshore wind lease sale record of $42 million for an area off New York in 2016.
Eleven companies submitted bids in the auction, also a record. The provisional winners of the auction were Equinor Wind US, formerly Statoil, of Norway; Mayflower Wind Energy, a subsidiary of Royal Dutch Shell; and Vineyard Wind, which is based in New Bedford and owned equally by two investment funds, Copenhagen Infrastructure Partners and Avangrid Renewables. They bid $135 million each for three similarly sized parcels of approximately 130,000 acres.
The areas are located about 20 miles from Martha's Vineyard and 44 miles from Block Island.
Before the lease becomes final, the Department of Justice and Federal Trade Commission must conduct an anti-competitiveness review of the auction. The provisional winners will be required to pay the winning bid and provide financial assurance to the Interior Department's Bureau of Ocean Energy Management.
Zinke said the auction demonstrates that the Trump administration isn't focused solely on fossil fuels.
"To anyone who doubted that our ambitious vision for energy dominance would not include renewables, today we put that rumor to rest," Zinke said in a written statement following the auction, which was conducted by BOEM.
Christer af Geijerstam, President of Equinor Wind US, said the lease is the company's second offshore wind lease in the United States.
"This acquisition complements our existing position on the U.S. East Coast and gives us a foothold to engage in the Massachusetts and wider New England market, a region notable for its strong commitment to offshore wind," Geijerstam said in written statement.
In December 2016, Equinor won a federal lease auction of 80,000 acres south of New York and east of New Jersey. The company is currently developing projects in that area for both states; Empire Wind in New York and Boardwalk Wind in New Jersey.
Vineyard Wind issued a statement Friday saying the company is excited about expanding its offshore wind presence in New England and will work with federal officials — and the fishing industry, environmentalists, wildlife experts, and local communities — as the project moves forward.
In Rhode Island, Vineyard Wind has encountered opposition from the Rhode Island Fishermen's Advisory Council, which has objected to the proposed layout of its turbines. The company is in negotiations to compensate fishermen for loss of access to valuable fishing areas, The Providence Journal reported Friday.
Orsted, on the other hand, has said it is adjusting the layout of its Martha's Vineyard lease area to accommodate the east-west fishing patterns of the region's fishermen. At a meeting in New London on Wednesday, an Orsted manager said there would be a one-nautical-mile space between turbine rows, allowing fishermen to do their work through the lease area, according to The Day of New London.
The newest leases will initially last for one year, during which each company must describe the meteorological towers or buoys they plan to use to assess the wind conditions. After that, the firms have another four and a half years to detail the construction and operation of the wind farms.
After completing an environmental review and winning all final approvals, the companies will have a lease of 33 years to build and operate the energy-producing wind turbines.
There are currently 15 active wind leases in federal waters that have generated more than $473 million in winning bids for nearly two million acres in federal waters according to BOEM.
Money received from offshore wind lease sales go to the United States Treasury.
Earlier this year, Massachusetts and Rhode Island announced offshore wind projects aimed at delivering a combined 1,200 megawatts of energy — or enough to power 600,000 homes.