Few bid after U.S. opens first-ever offshore wind leases in the Gulf of Mexico


The Coastal Virginia Offshore Wind pilot project is designed to demonstrate a grid-connected, 12-megawatt offshore wind test facility about 27 miles off the coast of Virginia Beach.

Stephen Boutwell, Bureau of Ocean Energy Management

By Halle Parker/WWNO

The Biden administration opened the first-ever leases for offshore wind in the Gulf of Mexico up for bid on Tuesday off the coasts of southwest Louisiana and southeast Texas. But the historic auction ended with underwhelming results. 

Sixteen companies were eligible to participate in the virtual auction of more than 300,000 acres of water bottom on the outer continental shelf of the Gulf — a space dominated for nearly a century by offshore oil and gas production. But just two companies submitted bids and the auction ended within a few hours. 

Located roughly 30 to 40 miles off the coastline, the sale included three sites: 102,480 acres south of Lake Charles, Louisiana and two — 102,480 acres and 96,786 acres — southeast of Galveston. 

Only the sites near Lake Charles attracted any bids, selling for $5,600,000, just above the minimum price. No companies bid on the sites closer to Texas.

The American Clean Power Association, the leading clean energy trade association, said Tuesday’s sale fell short of expectations, though it doesn’t plan to give up on developing in the Gulf.

“The Gulf is a pioneer region. Much like the Atlantic coast a decade ago, it will take steadfast local, state, and national support for the market to fully mature,” said Association Vice President of Offshore Wind Josh Kaplowitz. “Future lease sales in state and federal waters in the Gulf can provide a pipeline of projects that can help grow out a supply chain and achieve ambitious state and national offshore wind goals. 

The entire Gulf of Mexico wind lease sale had the potential to produce 3.7 gigawatts of renewable energy, enough to power 1.3 million homes — which is more than half the number of households in Louisiana.

It’s part of the Biden administration’s push to ramp up offshore wind development to meet its goal of 30 gigawatts of offshore wind energy capacity by 2030. 

“Today’s lease sale represents an important milestone for the Gulf of Mexico region — and for our nation — to transition to a clean energy future,” said Bureau of Ocean Energy Management Director Elizabeth Klein. “The Lake Charles Lease Area will have the potential to generate enough electricity to power about 435,400 homes and create hundreds of jobs.” 

Wind industry advocates like Jenny Netherton, a senior program manager for the Southeast Wind Coalition, say it presented an opportunity to develop a new type of energy in the Gulf. Her coalition is largely made up of a mix of industrial manufacturers, utilities and energy developers as well as some economic institutions and nonprofits. 

“The Gulf of Mexico built its economy on oil and gas, and I think having the chance to diversify meaningfully and to clean energy is an opportunity that Louisiana just shouldn’t let pass by,” she said. 

While some groups have called for offshore wind in the Gulf for more than a decade, she said the movement only picked up steam after Gov. John Bel Edwards and Louisiana’s first Climate Task Force included a target of developing 5 gigawatts of offshore wind by 2050. That commitment was instrumental as Edwards helped start an intergovernmental task force that has guided the sale. 

The Bureau of Ocean Energy Management set a minimum bid of $50 per acre, requiring companies to buy the two larger sites for at least $5.1 million and the third, smaller site for at least $4.8 million. Companies planning to participate in the auction had to submit $2 million deposits earlier this month. 

Ahead of the sale, the 16 bidders went through a vetting process with BOEM where the companies were required to submit detailed financial information, project plans

The 16 eligible bidders include: 

  • 547 Energy LLC, 
  • Avangrid Renewables, 
  • Coastal Offshore Renewable Energy LLC, 
  • Re Offshore Wind Holdings, LLC, 
  • Equinor Wind US LLC, 
  • Gulf Coast Offshore Wind LLC, 
  • Gulf Wind Offshore LLC, 
  • Hanwha Offshore North America LLC, 
  • Hanwha Q Cells USA Corp, 
  • Hecate Energy LLC, 
  • Invenergy GOM Offshore Wind LLC, 
  • RWE Offshore US Gulf, LLC, 
  • Shell New Energies US LLC, 
  • Total Energies Renewables USA, LLC, 
  • US Mainstream Renewable Power, Inc. 

Netherton said that while there isn’t a guarantee that the wind farms will be developed, BOEM has chosen areas with the least amount of conflict and vetted the proposals to ensure the companies will follow federal regulations and remain solvent. 

This sale is likely just the beginning as BOEM has studied 30 million acres in the Gulf for wind potential. An environmental assessment released earlier this year found that offshore wind development would have no significant impact, paving the way for the current lease sale. 

New wind lease sales are partly contingent on the continuance of offshore oil and gas lease sales in the Gulf as a result of the Inflation Reduction Act. Netherton said that there’s the chance another wind site could go up for bid in the Gulf next year — after the federal agency offers up at least 60 million acres for an oil and gas lease sale. 

Currently, there are only 7 offshore wind turbines in U.S. waters, though there are 16 projects slated for completion by 2027. Proposed projects have largely been clustered in the northeast. 


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