US BOEM Announces First Offshore Wind Auction Off California

On October 18, 2022, the United States Bureau of Ocean Energy Management (BOEM) issued a final sale notice (FSN) to offer five leases for sale on the outer continental shelf (OCS) off the California coast on December 6, 2022. BOEM will be offering three lease areas in the Morro Bay Wind Energy Area (WEA) off central California (OCS-P 0563, OCS-P 0564, and OCS-P 0565) and two lease areas in the Humboldt WEA off northern California (OCS-P 0561 and OCS-P 0562) with the boundaries as proposed in the proposed sale notice. The lease areas total approximately 373,268 acres with the potential to produce over 4.5 GW of offshore wind energy, power more than 1.5 million homes, and support thousands of new jobs.

Lease Area Details

The final identified lease areas are depicted as follows:

Source: BOEM

The FSN identifies 43 entities that BOEM determined are legally, technically, and financially qualified to hold a commercial wind lease offshore California and that may participate in the upcoming competitive auction, subject to meeting the requirements outlined in the FSN.

Changes from the Proposed Sale Notice

In response to comments received, the FSN makes several changes to the proposed sale format and procedures as well as to the related lease stipulations.

Instead of having two simultaneous auctions, BOEM simplified the sale format to be a single auction in which all the lease areas will be offered. In each round of the auction, a bidder can bid for at most one of the offered leases at a time. A bidder can switch between different lease areas from round to round, but it must bid in each round, and ultimately it can acquire at most one of the leases in the auction.

BOEM also added a 5 percent bidding credit for bidders who have committed to a qualifying General Community Benefit Agreement; increased the amount of the credit offered for the Lease Area Use CBA bidding credit from 2.5 to 5 percent; and removed the requirement for a 25 percent commitment of funds associated with the workforce training and/or supply chain development bidding credit at the time of the submission of the Lessee’s first Construction and Operations Plan.

Additional lease stipulations include provisions to:

Advance lessee engagement with Tribes and parties that may be affected by the lessee’s activities on the OCS;
Protect national security;
Require the lessee to coordinate with the California Coastal Commission on plan submissions;
Require the lessee to use an independent Fisheries Liaison; and
Protect the environment through the imposition of vessel speed requirements; marine mammal monitoring measures; a site-specific spill prevention and response plan; a critical operations and curtailment plan; requirements related to the avoidance of intentional contact within hard substrate, rock outcroppings, seamounts, or deep-sea coral/sponge habitat; and use of low-energy geophysical survey equipment.

Interior’s Press Release

In a related press release, the US Department of the Interior (Interior) stated that the FSN announcement “represents years of close coordination and engagement with the state of California, Tribes, ocean users, local communities and all interested parties to move us closer towards achieving the administration’s vision to fight climate change and realizing California’s clean energy future, while creating a domestic supply chain and good-paying union jobs.”