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    Duke Energy among companies with winning bids for NC offshore wind energy


    May 13, 2022 - Adam Wagner, The Charlotte Observer

     

      North Carolina’s largest electric utility and a French “supermajor” oil company won auctions Wednesday to lease a pair of sites for the production of wind energy off of the Brunswick County coast.

      The Bureau of Ocean Energy Management’s 18-round auction netted $315 million for the wind energy areas, which are each roughly 20 miles off of the coast. TotalEnergies Renewables USA won the westernmost leases with a $160 million bid, while Duke Energy Renewables Wind won the other with a $155 million bid.

      “Investments from two developers means increased supply chain investment and recruitment, workforce development and thousands of good-paying jobs and infrastructure development that will support other North Carolina industries,” Katharine Kollins, president of the Southeastern Wind Coalition, said in a statement.

      Wednesday’s lease auction was 35-fold higher than the $9 million Avangrid paid in 2017 for a lease off of Kitty Hawk.

      BOEM estimates that when the areas are built out, they will be able to generate enough energy to power about 500,000 homes.

      Duke, TotalEnergies winning bids

      The auction comes just days before Duke Energy has to submit a carbon plan to the N.C. Utilities Commission detailing how it plans to cut emissions 70% from 2005 levels by 2030.

      During an investor call this week, Duke Energy CEO Lynn Good said the pathways in the plan will all include solar and battery, strategies to cut energy demand and energy efficiency. But some will include onshore and offshore wind, as well as small modular nuclear reactors.

      “Each portfolio has been rigorously tested for reliability and affordability for our customers,” Good said.

      Following Wednesday’s lease sale, Duke Energy’s North Carolina president, Stephen DeMay, said in a statement that securing the lease off of southeastern North Carolina gives the utility options.

      “As we continue to assess the area and project potential, we look forward to listening and learning from diverse stakeholders and community members in the region to ensure we are being thoughtful about all aspects of the potential project,” DeMay wrote.

      Duke projects that the lease area it won — which makes up the eastern portion of the 110,091-acre site — could generate enough energy to power 375,000 homes.

      Company officials project that it will take about 10 years to develop the site.

      That will start with a site assessment plan, which Duke will develop over the next year. The plan will describe how Duke plans to evaluate the wind energy that’s available in the area, as well as possible impacts.

      TotalEnergies, the French oil giant that won the other lease, has shown interest in developing floating wind farms that will allow turbines to be installed farther from coasts. The company is working to develop two floating wind farms in France, 2 gigawatts of floating farms off of the South Korea coast and a 96 megawatt wind farm in the United Kingdom.

      Additionally, TotalEnergies paid $795 million to win a lease in the New York Bight off of the coast of New York and New Jersey. The company expects that 3 gigawatt project to come online by 2028, according to a press release.

      “This is the largest renewable energy project TotalEnergies has ever undertaken and we now have a portfolio of over 10 GW of offshore wind projects, a technology in which we aim to be a world leader by leveraging our offshore expertise,” Patrick Pouyanné, chairman and CEO of TotalEnergies, said in a statement after the New York auction.

      The Biden administration has set a target of 30 gigawatts of offshore wind by 2030, while N.C. Gov. Roy Cooper has set targets of 2.8 gigawatts of wind energy generated off of the North Carolina coast by 2030 and 8 gigawatts by 2040.

      Wednesday’s lease sale was the first time that BOEM offered bidders up to a 20% credit on their bid, as long as they pledged to invest those funds in developing the domestic supply chain. The agency hopes that those investments will help bolster the industry in the United States and begin to drive costs down, providing a domestic economic boost and limiting the distance that key parts like turbines have to be shipped.

      After the bidding, BOEM said the credit had netted about $42 million in pledged investments.

      In a statement, BOEM Director Amanda Lefton said, “This auction puts real dollars on the table to support economic growth from offshore wind energy development – including the jobs that come with it.”

      Attention turns to moratorium

      Even as Wednesday’s auction was taking place, attention had started to shift to an impending moratorium that would prevent additional offshore wind leases for 10 years beginning on July 1. Enacted under former President Donald Trump, the order initially seemed intended to target offshore drilling and exploration but also extends to offshore wind leases.

      U.S. Rep. Deborah Ross, a Raleigh Democrat, and Sen. Kirsten Gillibrand, a New York Democrat, joined 36 other members of Congress Wednesday in sending a letter calling for a repeal of that moratorium to be included in a sweeping innovation bill. Ross introduced an amendment that was included in the House version, known as the America COMPETES Act, while the Senate’s U.S. Innovation and Competition Act would not lift the moratorium.

      The final version of the bill, to be known as the Bipartisan Innovation Act, is now in negotiations between House members and senators. Wednesday’s letter calls for that bill to include the amendment introduced by Ross.

      “This critical provision would jumpstart clean energy development at a time when it is needed most, and ensure that these states are free to be a part of this competitive new industry,” the letter states.

      In a statement Wednesday, National Ocean Industries Association President Erik Milito said the so-called Carolina Long Bays auction indicated that the Carolinas could be “the next American offshore wind hub” and showed that the industry has potential outside of the Northeast.

      Milito also said the interest shows demand for future leases in the Carolinas. That momentum could be halted or slowed, Milito warned, by the looming moratorium.

      Pointing to the letter helmed by Ross and Gillibrand, Milito wrote, “Congress should pass this bipartisan measure, which is currently included in the America COMPETES Act, and help ensure the door remains open for offshore wind.”

      This story was produced with financial support from 1Earth Fund, in partnership with Journalism Funding Partners, as part of an independent journalism fellowship program. The N&O maintains full editorial control of the work.

      ©2022 The Charlotte Observer. Visit charlotteobserver.com. Distributed by Tribune Content Agency, LLC.

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