Two of the world’s largest oil and gas companies, along with several other energy companies, have expressed interest in pursuing a lease to develop an offshore wind energy farm off the Central Coast.
A subsidiary of Royal Dutch Shell – Shell Renewables and Energy Solutions LLC – and bp America Inc. both wrote to the U.S. Bureau of Ocean Energy Management (BOEM) to express eagerness about the proposed floating offshore wind farm in the Morro Bay call area west of Cambria and San Simeon.
“The development of offshore wind facilities is a significant opportunity for the U.S. government to meet society’s need for reliable and affordable energy, and most importantly to provide another tool to boost the nation’s economy and leadership in addressing climate change,” James Cotter, vice president of wind development at Shell, wrote in the letter to BOEM.
The main cause of climate change is burning carbon dioxide-releasing fossil fuels such as oil, gas and coal.
Both Shell and bp America, which have net worths of billions of dollars, indicated in their letters to BOEM that the proposed floating offshore wind development near Morro Bay presents an opportunity for them to expand their offshore wind energy portfolios and help meet their goals of net-zero emissions by 2050.
The comments were sent to BOEM in response to the federal agency’s call for nominations and information on the Morro Bay call area extensions, which was published on July 29 and closed on Sept. 13.
Those extension areas, which total 141 square miles, expanded the originally proposed area for a floating wind energy farm to a massive 399 square miles.
BOEM is now evaluating the nominations from companies interested in leasing the rights to develop and operate a floating wind farm in the extension areas. The agency must assess whether those companies are legally, financially and technically qualified to hold an outer continental shelf offshore wind lease, according to BOEM public affairs officer John Romero.
Once BOEM has evaluated those nominations and the comments it received, the agency will solidify the area in which the floating offshore wind energy farm can be built and then begin a formal environmental review process under the National Environmental Policy Act.
The environmental review, expected to be completed in early summer of 2022, will include public comment opportunities and will analyze the wind energy area for potential impacts associated with leasing and site assessment activities, Romero said.
A lease sale auction may happen in mid-2022, although it may take several more months or years before floating wind turbines are built in the ocean due to additional reviews and planning that must take place.
Companies express interest in offshore wind energy farm
Neither Shell nor bp submitted official lease nominations to BOEM. However, the agency said, that is not required to participate in a potential future competitive lease sale.
Two companies, Castle Wind LLC and Ocean Winds North America, submitted nominations to BOEM.
Five other companies – Shell, bp, TotalEnergies Renewables USA LLC, Equinor Wind US LLC and Aker Offshore Wind USA LLC – submitted comments expressing interest in leasing within the Morro Bay call area.
In 2016, Castle Wind submitted an unsolicited request to develop offshore wind energy off the Central Coast, starting the process currently underway. Additional research, calls for nominations and information, and negotiations between federal agencies to pin down the best area for development in the Pacific Ocean have taken five years.
In 2018, BOEM published a call for nominations and information for three areas for potential floating offshore wind energy development: one off the coast of Humboldt County in northern California, one off the coast of Diablo Canyon Power Plant near Avila Beach and another west of Cambria and San Simeon, which was deemed the Morro Bay call area.
BOEM received competitive interest from companies wishing to develop offshore wind for the three areas, though it was later decided that only the Humboldt and Morro Bay areas would be pursued at this time.
Specifically, 14 companies sent nominations to BOEM for developing floating offshore wind in the Morro Bay area after the 2018 call.
However, opposition from the U.S. Department of Defense stalled further action on the three call areas.
In late March, President Joe Biden announced an offshore wind energy goal of 30 gigawatts by 2030.
Two months later the Department of Defense, U.S. Department of the Interior and the state of California agreed to advance the Humboldt and Morro Bay areas for floating offshore wind energy development.
BOEM is not currently considering floating offshore wind energy development for the Diablo Canyon area.
The 399-square-mile Morro Bay call area is estimated to produce up to 3 gigawatts of energy – 10% of Biden’s goal – at peak production. It could also count toward 2% of the 145 gigawatts needed to achieve California’s mandated goal of 100% carbon-free electricity by 2045.
Although the floating offshore wind energy farm is widely supported, some have expressed concern that the ocean development will harm marine wildlife and disrupt the Central Coast fishing industry.
In addition, residents in Cambria and San Simeon are concerned about the visual impacts of the wind energy farm.
The wind turbines, once built, would give off a red glow at night from their safety lights and look like blips on the horizon during the daytime, according to a BOEM analysis. However, those 2019 visual simulations use a 1-gigawatt project, one third the size of the proposed 3-gigawatt project.
What are businesses’ ideas for Morro Bay call area?
The comments sent to BOEM from the seven companies interested in developing the floating offshore wind farm had several common themes.
Those included urging BOEM to split the 399-square-mile Morro Bay call area into two or three separate leases.
“It is important that BOEM design lease areas of at least 180 to 200 square miles to maximize economies of scale and minimize wake effect losses,” Downey Magallanes, bp’s head of policy and regulatory advocacy, wrote to the federal agency. “In so doing, BOEM can enable the optimization of developments, which can bring down costs, improve economic viability and ultimately reduce cost impacts to local ratepayers in California.”
Aker Offshore Wind noted that the Morro Bay area is large enough for three commercial-scale projects.
Splitting the 399-square-mile area into three would increase competition and allow developers to “capture economies of scale and provide a lower cost of energy for the benefit of electricity ratepayers,” Jonah Margulis, head of U.S. operations for Aker Offshore Wind, wrote in his comment letter to BOEM.
Castle Wind, in its lease nomination to BOEM, indicated that it wishes to develop a one-gigawatt floating wind farm in the Morro Bay call area, leaving two gigawatts of development potential up for grabs.
Some companies that wrote in agreed that BOEM, alongside state, local and other federal agencies, must invest in and develop the transmission networks that would connect the offshore wind energy to the grid.
“BOEM should consider the tradeoffs between the number of future leases auctioned, the respective amount of project subsea cables necessary and the amount of available onshore interconnection points along the California and Oregon coasts,” Cotter wrote in Shell’s letter to BOEM. “Not resolving these transmission and grid infrastructure challenges early on could lead to the underutilization of the federal lease areas.”
In his letter to BOEM, Margulis noted that offshore wind farms on the Central Coast could tie into available infrastructure at Diablo Canyon nuclear power plant and the already-retired Morro Bay Power Plant.
Those comments come as Gov. Gavin Newsom is considering a bill that, if he signs it into law, would require the California Energy Commission to create a plan for offshore wind development in federal waters.
The plan would need to address port infrastructure needs and necessary electricity transmission and grid upgrades needed to support the development, according to the bill.
All of the companies that wrote in to BOEM agreed that developing offshore wind off the California coast is vital to meeting both the federal and state government’s goals for renewable energy while providing economic benefits.
“The pursuit of national economic and security interests necessarily depends upon a national long-term energy policy that features U.S. renewable generation to meet our energy needs,” Cotter wrote in Shell’s letter to BOEM. “In the case of offshore wind development, the U.S. can generate new economic opportunities, maintain strong fishing communities and contribute to a reduction in carbon emissions.”
Panel event to discuss offshore wind energy on Central Coast
The Tribune will host a virtual informational panel event on Nov. 19 to discuss the potential offshore wind energy development coming to the Central Coast.
Panelists will be U.S. Congressman Salud Carbajal, BOEM Pacific regional director Doug Boren, California Energy Commissioner Karen Douglas, REACH CEO Melissa James and Cal Poly associate professor Ben Ruttenberg, director of the Center for Coastal Marine Sciences.
More information about the panel event will be released as it gets closer.
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