The Bureau of Ocean Energy Management is resetting its plans to develop the offshore wind energy sector in the Gulf of Mexico after determining there is competitive interest from at least two companies. Earlier this year, a planned offshore wind lease auction for the Gulf of Mexico was canceled.
While the efforts to auction leases in the Gulf of Mexico have so far drawn little interest, the bureau now reports it has determined there is competitive interest in two potential lease areas located off the southeast coast of Texas. At the end of July, the bureau published a Request for Competitive Interest after receiving an unsolicited request from Hecate Energy Gulf Wind, a Chicago-based company focusing on renewable energy and storage projects. To date, the company has developed mostly solar energy but proposed to BOEM the Gulf Wind 2 project which would consist of up to 133 fixed-bottom turbines, each with a capacity of 15-23 MW, resulting in an overall maximum capacity of approximately 2000 MW.
Under the government guidelines, BOEM needed to seek other qualified companies with potential interest in the sites. It could then either move forward with a noncompetitive lease or determine that interest supported a lease auction.
Hecate’s proposal is for two lease areas separate from the ones BOEM was pursuing. It reported that the two areas were evaluated as options for development in May 2022, but were not recommended for auction due to their area being less than 90,000 acres each, which was presumed to be too small an area for an economic project. Hecate however believes that these sites, developed in tandem with a total of 142,000 acres, would provide adequate area for a commercial project. One lease area is just over 74,0000 acres and the second is just over 68,000 acres.
Invenergy, another Chicago-based renewable energy company that has a broad portfolio of wind, solar, transmission infrastructure, and natural gas power generation and advanced energy storage projects, submitted to BOEM’s Request for Competitive Interest. The company has not developed offshore wind energy but registered interest in the same leases and was qualified by BOEM.
BOEM reports it is reviewing the other comments received as it works to define the opportunities in the Gulf of Mexico. Based on the two companies’ interest, BOEM will move forward with the competitive lease process and now expects to schedule a lease auction for the sites in 2026.
There have been several previous attempts to develop the offshore wind sector in the Gulf of Mexico. In August 2023, BOEM conducted the first-ever offshore wind energy auction for the Gulf of Mexico. It offered two areas offshore from Galveston, Texas, and a third offshore from Lake Charles, Louisiana. The Texas sites did not receive bids but the Louisiana site of just over 102,000 acres was sold to RWE for a bid of just $5.6 million. The company said it was unsure of its plans considering it a long-term opportunity while BOEM said it had the potential for approximately 1.24 GW of energy.
A second Gulf of Mexico auction was planned for 2024 with BOEM set to offer four leases. While it received 25 comments, only one company expressed interest in participating in the auction. BOEM cancelled the sale due to a lack of competitive interest saying it would review plans for the region.
Texas Land Commissioner Dawn Buckingham on behalf of the state has openly opposed the development of these or any offshore wind leases calling the Biden administration's efforts “reckless.” She cited Hecate’s lack of experience with offshore wind development, raised concerns about the impact on wildlife, and highlighted the exposure to hurricanes in the Gulf of Mexico.
