On May 11, 2022, the Bureau of Ocean Energy Management (BOEM) held a competitive auction for two lease areas in the Carolina Long Bay area off the coast of North Carolina. After an exciting day, the auction concluded with
$315 million in bids, and BOEM announced the provisional winners of the lease areas:
|Lease 0545||Lease 0546|
|Provisional Winners||TotalEnergies Renewables USA, LLC||Duke Energy Renewables Wind|
|Total Lease Amount||$160 million||$155 million|
Figure 1: Map of Carolina Long Bay Lease Areas. See Carolina Long Bay | Bureau of Ocean Energy Management (boem.gov).
Instead of the purely ascending monetary auctions held in the past, BOEM used a multi-factor auction format that included an 80 percent monetary bid and a 20 percent non-monetary factor, which required a commitment to make qualified monetary contributions to workforce training and/or supply chain development programs or initiatives. In addition, unlike the New York Bight auction, bidders were able to qualify and bid on and win one or two lease areas.
As it did with the recent New York Bight auction, BOEM will release round-by-round details of the auction in the coming days that identify the entities that participated and how they bid in each round. In the meantime, general round-by-round information can be found on BOEM’s website.
Next, the US Department of Justice (DOJ) has 30 days to conduct an antitrust review of the auction. After the DOJ review is completed, BOEM will send copies of the lease to each winner with instructions on how to execute the lease. Within 10 business days of receiving the lease, the auction winners must post financial assurances, pay any outstanding balance of their bonus bid (i.e., winning monetary bid minus bid deposit) and sign and return the lease. Once BOEM has received the signed leases and verified that all other required materials have been received, BOEM will execute the leases.
Potentially Last NC Auction for a While
Due to the looming offshore leasing moratorium that commences on July 1, this could be the last BOEM North Carolina offshore wind auction for the next 10 years. In 2020, former President Trump issued a memorandum stating: “I hereby withdraw from disposition by leasing for 10 years, beginning on July 1, 2022, and ending on June 30, 2032: The portion of the area designated by the Bureau of Ocean Energy Management as the Mid Atlantic Planning Area that lies south of the northern administrative boundary of North Carolina,” which is the administrative boundary depicted on the Atlantic NAD 83 Federal Outer Continental Shelf (OCS) Administrative Boundaries map. Therefore, while BOEM can move forward with planning and analysis for other areas off the North Carolina coast, it will not be able to issue new leases until the moratorium is lifted or ends.
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