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Deepwater Wind has won the U.S.' first-ever competitive lease auction for renewable energy development in federal waters, bidding $3.8 million for both available sites located off the coasts of Rhode Island and Massachusetts.

On Wednesday, the U.S. Department of the Interior's Bureau of Ocean Energy Management (BOEM) held the auction for two parcels, totaling more than 164,000 acres, in a designated Wind Energy Area on the Outer Continental Shelf.

Deepwater Wind plans to develop the Deepwater Wind Energy Center (DWEC), a utility-scale wind farm with up to 1 GW of capacity. The developer says DWEC’s 200 or so wind turbines will be located 20 to 25 miles from the nearest landfall. In addition, the project will include a regional transmission system linking Long Island, N.Y., to southeastern New England.

Deepwater says construction could begin as early as 2017, with commercial operations by 2018.

“This is an enormous step forward for the industry. This is the best site for offshore wind in the United States, bar none,” says Deepwater Wind CEO Jeffrey Grybowski. “Our Deepwater Wind Energy Center Project will produce clean power and jobs for an entire region. It’s very exciting.”

Deepwater Wind’s winning bid came in the 11th round of the competition. The developer previously paid a $900,000 deposit to participate in the auction, with the remainder of the bid amount to be paid in the coming months when the official lease is signed for the sites.

In addition, Deepwater Wind will pay the federal government annual rent payments of approximately $500,000 beginning this year, until a wind farm is operational on the site. Once the wind farm is operational, Deepwater Wind is obligated to pay the federal government an annual royalty fee based on the value of the energy produced.

The BOEM will hold its next competitive lease sale for offshore wind on Sept. 4, which will auction nearly 112,800 acres offshore Virginia.




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