After years of headwinds, a record-breaking $405.1m offshore wind lease is finally blowing the US offshore wind industry in the right direction.
Though America boasts large onshore wind farms, it has lagged far behind the rest of the world in harnessing offshore wind.
The wind market is going off(shore)
Of the world’s 30 largest onshore wind farms, 19 are in America.
But America has only 1 offshore wind farm, a tiny facility that produces just 30 megawatts of energy. In contrast, the 30 largest offshore wind farms produce at least 288 MW (the world’s largest produces 659 MW).
But this week’s deal will create 3 facilities off the Massachusetts coast that are predicted to produce 4.1 giga-watts — 6x as much energy as today’s largest facility.
Uncharted opportunity for the US wind market
As recently as 2015, Massachusetts offshore wind leases failed to attract interest, selling for less than $1.50 per acre to the only 2 interested companies.
This week’s historic sale attracted interest from 11 different bidders, and leases went for $1k+/acre — 4x the $222/acre rate for a recent oil lease in the Gulf of Mexico.
Thanks to competitive yields, wind investment won’t blow over anytime soon: Analysts expect the US offshore market to see a compound annual growth rate of 50% through 2026, which is important since it takes about 10 years to get new turbines turning.
