From Wind Energy Update
Statoil’s record offshore wind lease bid gives it access to the high-load New York market for its first U.S. project but a power purchase agreement will require state support due to the large capacity size and nascent installation network.
New York City offers a high load factor but average wholesale prices are well below current offshore wind costs.
In December, the Bureau of Ocean Energy Management allocated Statoil Wind the lease for its 79,350 acre New York Wind Energy Area at a record-high offshore lease price of $42,469,725.
The lease win confirmed Statoil’s return to the U.S. offshore wind market after the Norwegian firm pulled out of the $120 million 12 MW Hywind Maine project off Boothbay Harbor in late 2013.
Statoil’s bid represents $535 per acre compared with an average of $13.5 per acre for the preceding 11 East Coast lease allocations, highlighting the Norwegian group’s commitment to the U.S. offshore wind market. Since 2010, the BOEM has authorized leases in Massachusetts, Rhode Island, New Jersey, Delaware, Maryland and Virginia.
New York State is “probably the singularly most attractive” U.S. offshore wind market, Parag Soni, Director of Energy at Navigant Consulting, told Wind Energy Update.
The offshore wind sites are adjacent to NYC which has a very high load factor and power prices are significantly higher than in many other East Coast markets, Soni noted.
“If you are going to intervene and get into the U.S. [Offshore wind] market this is the place to do it,” he said.
Filed Under: Financing, News, Offshore wind