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US to Sign Leases for Offshore Testing

The US federal agency tasked with permitting offshore renewable energy projects has selected 11 wind and marine projects to receive temporary leases.

The leases will be issued under the US Minerals and Management Service's interim policy, which the agency is using while it finalises permitting rules for offshore wind and marine energy development. The leases will be valid for up to five years, will not allow for power generation and will not guarantee future commercial development rights to the site. Despite these limitations, MMS believes that the leases will help developers begin technology and resource testing while it finalises its official lease rules.

In April 2008, the MMS designated 16 sites on the outer continental shelf that would qualify for these temporary leases. On 11 of the sites, the agency received only one bid, so it can now sign temporary noncompetitive leases.

Babcock & Brown-owned Bluewater Wind is to receive four of the 11 noncompetitive leases; one off the coast of Delaware and three in New Jersey. Winergy Power will get two leases off the coast of New Jersey and Fisherman's Energy will receive the sixth and final permit in the state. MMS said in a press release that Southern Company and Aquantis will receive a permit for development off Georgia and Florida, respectively. Almost all of the noncompetitive permits are for wind resource testing. Aquantis will receive the only noncompetitive ocean current and technology testing lease.

However, marine energy developers hoping to test their technology and ocean resources at the five remaining sites off the coast of California and Florida may have to wait until the MMS completes its official leasing rules at the end of this year. The MMS received more than one bid for each of the five sites and said that it will not issue competitive leases under the interim rules, citing time, staffing and budget constraints.

The MMS said it could issue noncompetitive leases if the marine developers agree to collaborate and share information. Utility Pacific Gas & Electric would have to work with Marine Sciences as both attempt to test wave resources at two sites in California. On the east coast, tidal energy developer Vision Energy would have to collaborate with Oceana Energy, Marine Sciences, and Florida Power & Light in collecting ocean current data at three separate sites in Florida.

Developers at these five sites may just decide instead to wait until the official rules are complete at the end of the year and apply for a lease in a competitive bid process in 2009.