Hi everyone. I'm Dan Chorost.
Katie Ghilain Trudell:
And I'm Katie Ghilain Trudell.
We are partners at the law firm of Sive Paget Riesel, an environmental and energy law firm located in New York city. For the next hour, we're going to talk about offshore wind, specifically, the permitting and development of offshore wind in the United States. Offshore wind is quickly emerging as a leading large-scale energy solution to three main problems. First, because of the threat posed by climate change, many states and the federal government are increasingly demanding that the electrical grid be decarbonized. That is, that we move away from power plants that burn fossil fuels to create electricity.
Second, many of the fossil fuel and nuclear plants built in the 1960s and 1970s are reaching the end of their operational lives. So even setting aside the threat of climate change, we need new sources of power anyway. And third, as our country bounces back from the COVID pandemic, states and the federal government are focused on creating economic engines, and the development of a new industry in this country promises to deliver significant economic benefits, including the creation of tens of thousands of new jobs and billions of dollars in economic activity. Because offshore wind can address all three of those problems and because the cost of producing offshore wind power continues to fall as technologies improve, you can begin to get a sense of why this industry is enjoying massive momentum in the United States right now.
Katie Ghilain Trudell:
Here is the state of play as of August 2021, when Dan and I are recording this. Although Europe has been building offshore wind farms for about two decades, right now, the US has only two very small pilot wind farms in operation. One, off of Block Island, Rhode Island, and the other off of the coast of Virginia. These are small projects with a total of only seven small turbines between them. But for the reasons we will talk about in the next hour, the stage is set for this industry to explode in the US. Many states along the Eastern Seaboard and now the West Coast as well, are ready to commit to these projects with long-term procurement contracts, and the new Biden administration has made offshore wind a priority, not only to decarbonize the grid and to help combat climate change, but also because of the significant economic benefits that this new industry will bring.
A quick word about us. Katie and I have had the privilege of working to support New York state in its efforts to attract the offshore wind industry to New York. That's a significant undertaking because as of now, there are no experienced American offshore wind developers. Most of the largest, such companies, are European. Today, our firm represents one of the major global offshore wind developers that [inaudible] seeking permits and approvals to construct and operate several very large offshore wind farms that will bring over three gigawatts of clean energy to New York state's grid. We also are helping to secure permits for a significant new port facility designed to allow offshore wind developers to stage and assemble the massive turbines and other equipment needed to construct offshore wind farms in the ocean. So let's start with a little background. Let's talk first about how offshore wind actually creates electricity. The principle is simple.
A wind turbine is placed in the ocean, ideally in a location where there is strong and persistent wind. Although wind is an abundant resource on the planet, some parts of the world have better wind than others. As the wind turns the blades of the turban, a rotor inside the turbine, begins to turn and spins a generator which produces electricity. The more the wind turns the blades, the more electricity is created. Although the technology has improved, this simple principle of using the kinetic energy of wind to create energy that people can... Let's talk first about how offshore wind creates electricity.
The principle is simple. A wind turbine is placed in the ocean, ideally in a location where there is strong and persistent wind. Although wind is an abundant resource around the world, some parts of the planet have better winds than others. As the wind turns the blades of the turbine, a rotor inside the turbine begins to spin a generator which produces electricity. The more the wind turns the blades, the more electricity is created. Although the technology has improved this simple principle of using the kinetic energy of wind to create electricity, for people to harness, is essentially the same as the windmills that started to appear 1500 years ago across the Middle East, Europe, and Asia.
Well, most of you probably have seen a wind turbine on land. Chances are, you have not seen an offshore wind turbine yet. Onshore and offshore turbines generally look the same, but their scale is completely different. When designing and installing turbines onshore, a developer needs to account for terrestrial limitations, like the width of the road network that the turbine will be transported on. So the largest onshore turbines can only be several hundred feet high, but offshore, developers can go much bigger because they don't need roads. Turbines are assembled at port facilities and then loaded onto large vessels that bring the turbines out to the ocean and install them. So today's largest offshore turbine stands at about 900 feet, which is almost as tall as New York City's Chrysler building. Each new generation of machine continues to grow larger. And this increasing scale yields more energy at a lower cost.
Let's talk briefly about the five main components of an offshore wind turbine, the foundation, the tower, the nacelle, the rotor, and the blades. At the very bottom of the machine is the foundation. The foundation secures the offshore turbine to the ocean floor. Foundations are large and heavy so that they can support the turbines weight. Just in, as a side, I'm talking here about the traditional, fixed bottom, offshore wind turbines that have been used for about 20 years, but you should be aware that there's a new class of offshore wind turbine that floats and does not have a foundation. And those turbines will likely soon be used off the West Coast and eventually here in the deeper parts of the ocean off the East Coast of the US. These new floating turbines are constructed differently from the traditional ones. The next major component is the tower, which is the backbone of the turbine that rises up from the foundation. Towers typically are made of tubular steel. Because winds are stronger as you move higher from the ground, the tower raises the nacelle and the blades up to a height that will capture more wind.
The nacelle is the box that sits on top of the tower and it's really the heart of the machine. The nacelle contains the rotor hub, the shaft, brake, gearbox, and generator. Generally speaking, this is the equipment that converts the kinetic energy of the turning blades into electricity. The rotor is the part of the turbine that turns and consists largely of the blades that are inserted into the hub. The blades are made of a strong composite material and are hollow so as to be light. The blades are attached to the hub and are angled to best catch the wind. The blowing wind causes the hub to spin, which in turn causes the generator to produce electricity.
Katie Ghilain Trudell:
So that's what a single offshore wind turbine looks like. When you install a bunch of turbines together in one geographic area, you get an offshore wind farm. Now, here's how that works. A series of underwater cables connects each turbine in an offshore wind farm to an offshore substation. The offshore substation looks like a really big box rising out of the water near the turbines, and its function is to collect all of the energy generated by the turbines, and to move that energy ashore. To accomplish that, the offshore substation is connected to an offshore export cable or cables, plural, depending on how much energy is produced. Those export cables then run underwater, all the way, to a landfall point onshore. The export cable comes ashore and then interconnects to an onshore substation in order to inject the wind farms energy load into the electric grid.
So big picture, that's how offshore wind turbines generate electricity and deliver that energy to the grid, which in turn, supplies power to people's homes and businesses. The offshore export cable route dictates a critical jurisdictional issue. So let's talk about jurisdiction for just a moment, and then we're going to come back to it later. When the export cable gets close to shore, it is in state jurisdiction, because the various states along the shoreline control the waters of the ocean, starting at the beach and extending out three miles. The federal government's jurisdiction of the ocean runs from three miles to 200 miles from shore. This area is referred to as the Outer Continental Shelf lands. The United States Department of the Interior through its Bureau of Ocean Energy Management, or BOEM, administers weather and how the Outer Continental Shelf ocean areas are used for offshore wind development. BOEM identifies suitable areas in federal waters that can be leased to offshore wind developers, and then auctions those areas off, and serves as lead agency for the federal environmental review and approvals needed before developers can build and operate offshore wind farms.
The vast majority of US offshore wind farms are going to be located in federal waters. The great lakes are the only viable options I know of for projects that are entirely in state waters. Today, BOEM has leased to developers, 18 separate areas in the Outer Continental Shelf. Those areas are typically about 80,000 acres each, and more federal lease areas and more federal auctions are coming soon. But as I mentioned, keep in mind that because the energy generated at each of those wind farms will need to come ashore by the underwater offshore export cable, each wind farm project will also implicate the jurisdiction of the state through which the cable will run to connect to the onshore grid. So those are some of the basics. Now, Katie has a little more about the context of the offshore wind industry.
Katie Ghilain Trudell:
Well, offshore wind is a new emerging industry in the United States. It is not new when considering the global context. The first offshore wind farm was the Vindeby Offshore Wind Farm, which was located off of the coast of the town of Vindeby, which is on the Danish island of Lolland. The farm had 11 turbines, each with a 0.45 megawatt capacity for a total installed capacity of 4.95 megawatts. It started operation in 1991 and was decommissioned in 2017 for cost reasons. Vindeby was pioneered by Elkraft, which became part of DONG Energy, which is now known as Orsted, a familiar name for those of you following the US offshore wind industry's evolution.
By the end of 2020, global offshore wind installed capacity was about 35 gigawatts or 3500 megawatts, with contributions from the US, UK, Sweden, Spain, Portugal, Norway, Netherlands, Ireland, Germany, France, Finland, Denmark, Belgium, Vietnam, Korea, Japan, Taiwan, and China. It's astounding to think about the growth over the course of 30 years from just shy of five megawatts off of Denmark in 1991 to 3500 megawatts across the world in 2020. As we'll discuss later, in this presentation, we expect this growth to continue perhaps exponentially over the next 30 years.
So who were the major global offshore wind developers? You might be surprised to learn that the answer is, the oil majors. Orsted, as Katie said, formerly DONG Energy of Denmark, Equinor, formerly known as Statoil, the state oil company of Norway, Iberdrola, which is Spanish, Innogy from Germany, and Vattenfall from Sweden. These companies are now among the largest renewable developers in the world, but virtually all of the world's big oil players are making serious investments in offshore wind, either on their own or in partnership with other developers. I'm thinking here of companies like Shell Oil, Total, and British Petroleum. These oil companies are aggressively investing in offshore wind for a few reasons. First, there is strong potential for offshore wind growth globally, particularly in the US and the Asian markets. North America is widely considered to be the fastest growing region in the world for offshore wind development through 2026.
The United States has an abundant shoreline on both coasts with major cities sited on or near the Atlantic and Pacific oceans. And many states and the federal government are moving toward net zero, carbon emission goals or mandates. In Asia, Japan built the region's first offshore wind project in 2003, but regional growth was slow until 2014 when China released its national offshore wind development plan. In 2017, China had built over one gigawatt of offshore wind capacity, and by 2018, it became the world's leading market for new installations. Today, in addition to continued growth in Japan and China, there is significant offshore wind activity in Taiwan, South Korea, and Vietnam.
Second, the oil managers understand the technology at play in offshore wind. Installing turbines in the ocean is similar to the expertise these companies have in constructing offshore oil and gas platforms. And third, these oil and gas companies see the writing on the wall. As the world gets more serious about fighting climate change, there is increasing pressure to eliminate fossil fuel consumption. To be viable over the longterm, the oil and gas companies, which already are in the energy business, will need new ways of supplying energy that can provide steady revenue streams in the future.
Katie Ghilain Trudell:
And we're already seeing those oil majors turned offshore wind majors, investing in offshore wind here in the US. The United States first offshore wind farm, a pilot project called Block Island off of Rhode Island, is owned and operated by Orsted. Block Island has five offshore wind turbines that produce about 30 megawatts of offshore wind energy, enough to power approximately 17,000 homes. It has been in operation since 2016. Orsted also was involved in a second pilot project, Dominion energy's Coastal Virginia offshore wind farm, which has a capacity of 12 megawatts and became operational in 2020. Whereas Block Island was in Rhode Island state waters, the Coastal Virginia project's two turbines were the first to be installed in federal waters.
More than a dozen more offshore wind projects are in various stages of development here in the US. And that is just the beginning, when you consider the growing demand for renewable energy and the vast offshore wind potential that exists just off of America's shores. In 2016, the US Department of Energy and the Department of Interior issued the National Offshore Wind Strategy, which found that the US offshore wind potential exceeds 2000 gigawatts, nearly double the nation's electricity use. That number increases to over 11,000 gigawatts when floating turbines are considered, as they open up deeper waters to offshore wind development. To put that in perspective, recall that the global installed capacity right now is about 35 gigawatts, which seems like nothing compared to the potential to develop 11,000 gigawatts here in the US alone.
I mentioned earlier that some parts of the world have better offshore wind than others. That is, stronger and more sustained wind levels. Global wind resources have largely been mapped. And as for the US, we have a few areas that have extraordinary wind. The strongest offshore winds in the US can be found in Northern California, in Oregon, the Great Lakes and in the New England, Middle Atlantic states, principally from New York and New Jersey up to Maine. But other regions are in play, and exploratory work and some farm project proposals are going on just off of North and South Carolina, as well as along the Gulf Coast.
There's one significant physical challenge to developing offshore wind around Northern California and Oregon. The ocean floor there is so deep that traditional fixed turbines just won't work. However, the imminent commercial availability of floating wind turbines will support tremendous growth in West Coast offshore wind development. The Pacific Ocean off of California also has a high concentration of US military uses including training grounds for the various branches of the armed services. Those conflicts can and will be worked out, but it will take some time and careful planning to ensure that offshore wind and the military are able to co-exist on the West Coast. We're going to touch on the Biden administration's recent announcements concerning the West Coast a little bit later.
The Great Lakes region has rich wind resources, and is one of the very few areas where offshore wind development may occur outside of federal waters, as well as in fresh water conditions. However, the Great Lakes have several challenges to overcome before offshore wind takes hold there. Some challenges are technical and not present on either coast. For example, the water depth of the Great Lakes can drop off rapidly and parts of them ice over in the winter. These conditions may require changes to turbine design and operation. Also, the relative availability of land around the Great Lakes means that unlike either coast, onshore renewables can be more cost-effective around the Great Lakes region. And finally, the Great Lakes are so close to Canada that Canadian and US treaties may complicate what is already a complex, permitting endeavor.
The New England, Middle Atlantic region on the East Coast is often referred to as the Saudi Arabia of offshore wind, and for good reason. This part of the country has the perfect storm of conditions for offshore wind, a shallow Outer Continental Shelf, meaning traditional fixed bottom turbines are perfectly viable here, strong winds, and plenty of major cities along the coastline, New York City, Philadelphia, Boston, and more, all of which need vast amounts of energy. For all of these reasons, plus the states' and the federal government's interest in economic generation, the Northeast is where most of the offshore wind development activity is currently centered. Most of BOEM's lease areas are along the Eastern Seaboard, and many of the states there already have goals or legislative mandates to procure large amounts of offshore wind energy within the next 10 years. New York's mandate is for nine gigawatts of offshore wind energy by 2035, that will power over four and a half million homes.
New Jersey wants seven and a half gigawatts of offshore wind energy by 2035. That's going to power almost 4 million homes. And Massachusetts will procure four gigawatts by 2027 enough for almost 2 million homes. As Katie's going to talk about a little later, the Biden administration's goal is to ensure the development of 30 gigawatts nationally by 2030, which would be enough to power, roughly 15 million homes around the country. As we're going to discuss, there was no shortage of challenges that the offshore wind industry will need to overcome in order to fully take root in the US. And different regions of the country have different challenges.
Development along the East Coast has some of its own unique issues. There is a very robust fishing industry in this region, which has been around for hundreds of years. The New York Bight is also one of the most heavily trafficked ports in the world. So vessel traffic and safety is critically important. And the land along the New York, New Jersey harbor area is highly developed as well as very expensive. So it is quite difficult to find adequate waterfront space to store and assemble the large machines involved in offshore wind or to accommodate the heavy lift vessels that are required to install those machines.
Katie Ghilain Trudell:
Progress was slow during the prior administration, but the Biden-Harris administration is focused on offshore wind as an integral part of combating climate change, achieving the United States ambitious, renewable energy goals, and creating jobs in the post-pandemic recovery, and for good reason, considering the potential US capacity and offshore wind's many other benefits. Offshore wind offers vast amounts of clean, renewable energy, close to coastal cities that both need the energy and are most susceptible to climate change impacts. Farms can be built far offshore and therefore avoid many problems associated with onshore power generation projects, such as visual impacts, bird and bat impacts, site control challenges, and environmental justice considerations.
Floating wind technology will move projects even farther from shore, which will further reduce these potential issues. As emphasized by the Biden-Harris administration, offshore wind offers opportunities for job creation in the aftermath of the pandemic, for the wind energy production itself as well as the revitalization of ports and grid infrastructure. In August 2020 study by Wood Mackenzie entitled, Economic Impact Study of New Offshore Wind Lease Auctions by BOEM forecasts that total investment in the offshore wind industry will be $17 billion by 2025, $108 billion by 2030, and $166 billion by 2035. It estimates that from 2022 to 2035, $42 billion will be invested in turbine manufacturing and supply chain, $107 billion in the construction industry, and $8 billion in the transportation industry and ports. That study also estimates that BOEM's leasing of over 2 million acres off the East Coast in California, between 2021 and 2022, could generate 37,000 megawatts of offshore wind development and support 80,000 jobs per year, for the next 10 years,
We've covered many of the environmental and economic benefits of developing an offshore wind industry here in the United States. Now, let's talk about some of the challenges to realizing that development. First, we are talking about a novel industry in the United States with a complicated permitting structure that involves federal, state, and local levels of government. The regulatory agencies like BOEM are trying to create the permitting roadmap at the very same time that they are driving down the road. And that's not a comfortable place to be either as the regulator or as the project developer. And more generally, most of the European companies that are best positioned to bring offshore wind to the United States are not familiar with the US permitting process that involves so many different jurisdictional layers and governmental agencies. Also, there are concerns regarding the potential impact of offshore wind farms on existing ocean users, primarily the fishing community.
This is particularly tricky given the lack of a unified voice speaking on behalf of that industry. And each different subset of the fishing community tends to fish in different locations, at different times of the year, with different methods and equipment and at different levels of the ocean. For example, scallop fishers scrape at the bottom of the sea floor while fluke fishers deploy nets near the surface of the water. Offshore wind will be a significant source of litigation for many years to come. Fishing interests are likely to litigate. Indeed, as we will discuss, they already have. Other likely candidates to challenge projects are landowners or municipalities that will be affected, or that perceive that they'll be effected by visual or other impacts from offshore wind development.
The poster child for that type of threat is the ill-fated Cape Wind project, which in 2001, a developer proposed to be located just over three miles from shore in Nantucket Sound off of Massachusetts. In 2010, the US Department of the Interior awarded Cape Wind the first US offshore wind lease and the project would have been the country's first utility scale offshore wind farm. BOEM initially approved Cape Wind in 2011 despite the fact that the project's 130 turbines would have been plainly visible from shore. Some of the wealthy homeowners on Cape Cod did not want their ocean front views disturbed, and they [inaudible] relentless, 15-year litigation campaign. NIMBYism makes strange bedfellows. Killing or delaying Cape Wind may have been the only thing that the Kennedy family and the Koch brothers ever agreed on. The developer ultimately prevailed in over a dozen lawsuits, but the project died anyway, largely as a result of the delays caused from the litigations.
As a result of the Cape Wind experience, BOEM leases are now much farther out in the ocean. And some states have indicated that they will not procure energy from projects within 10 or 15 miles from their shores. These things greatly reduce the likelihood that an offshore wind farm will have visual impacts from shore. More recently, the scallop industry formed a group called Fisheries Survival Fund to challenge BOEM's first lease auction for an area offshore of New York state. In that federal lawsuit, Fisheries Survival Fund alleged that BOEM violated the National Environmental Policy Act or NEPA and the Outer Continental Shelf Lands Act or OCSLA in the auction for the lease that Equinor Wind US, formerly Statoil, ultimately won. Lawsuit alleged that BOEM failed to analyze the environmental impact of issuing a lease under NEPA and failed to adequately protect fishing interests in violation of OCSLA. The DC District Court dismissed the NEPA claims as unripe and dismissed the OCSLA claims for failure to comply with a 60-day pre-suit notice provision. In May 2021, the DC Circuit Court of Appeals affirmed that decision on the same grounds.
Regarding the NEPA claim, the DC Circuit found that the lease issuance did not trigger BOEM's NEPA obligations because the lease, "does not, by itself, authorize any activity within the leased area." Instead, the lease only grants the exclusive ability for the lease holder to study the site and then to submit a construction and operations plan. As the court observed, even after issuing a lease, BOEM retains the authority to disapprove and prevent activities proposed in the area if those activities would pose unacceptable environmental consequences. And two other lawsuits were just filed within a few weeks of when we are recording this. In late July 2021, a handful of residents sued pro se in New York State Court to nullify the approvals for the South Fork wind project. The South Fork project will be built in federal waters, north of the Eastern tip of Long Island, and will run its export cable into the very wealthy village of Wayne Scott, in the very wealthy town of East Hampton.
Among other claims, the lawsuit, Kinsella versus Long Island Power Authority, attacks the underlying procurement between the Long Island power authority and the developer, alleges violations of the Public Authorities Law, and challenges the sufficiency of the project's environmental review. Also in July 2021, a lawsuit was filed in the US District Court for the District of Massachusetts, alleging that the environmental review for the Vineyard Wind project failed to consider that project's impact on endangered species, other ocean users, and interestingly, on onshore renewable developers. The case is called Allco Renewable Energy versus Helen. We're going to talk more about the Vineyard Wind project in a little while. But in short, the project is located off the coast of Massachusetts, and very recently became the first US utility scale, offshore wind farm to receive all regulatory approvals that are required, and that's a pretty big deal. The litigant in this case is the president of a small solar company and a part-time resident of the very wealthy island of Martha's Vineyard.
Is anyone seeing a pattern here? That same litigant was involved in some of the past challenges to Cape Wind. He claims that the environmental impact review should have considered, among other things, whether the turbines can withstand a category three hurricane, and whether the Vineyard Wind project would put commercial fisheries out of business. One thing is virtually certain, there will be more litigation to come. Project opponents will challenge BOEM's identification of and auctioning off of additional lease areas, and they also will challenge the state and federal environmental impact reviews and subsequent permits and approvals that are going to be coming down the pike for the projects yet to come. So stay tuned.
Katie Ghilain Trudell:
Speaking of permits and approvals, I'd like to talk for a few minutes about the complicated legal landscape of offshore wind. Offshore wind permitting involves many layers like onions or [olivers] for my fellow Shrek fans out there. There are federal, state, and local permits and approvals involved. It also involves an alphabet soup of acronyms. So please bear with me. I'd like to direct your attention to the simplified representation of a typical offshore wind farm. The wind turbines making up the wind farm, typically are located about 20 to 30 miles offshore on the Outer Continental Shelf or OCS. The Bureau of Ocean Energy Management, or BOEM, has jurisdiction over energy facilities on the OCS. Before an offshore wind farm can be approved, the area has to be leased. BOEM identifies lease areas, auctions those lease areas, and then leases the areas to developers. BOEM then approves site assessment activities captured in the developers site assessment plan.
After the developer installs meteorological buoys and conducts a variety of survey and sampling work, the developer submits a construction and operations plan or COP, for BOEM's approval. Upon the filing of a complete COP, BOEM leads the environmental review required under the National Environmental Policy Act or NEPA. The environmental impact statement prepared under NEPA, not only supports BOEM's COP approval, but it also covers all of the many federal permits and approvals that must be obtained.
This, by the way, is where we toss the entire alphabet in the soup, because permits and approvals have to be issued by EPA, the Environmental Protection Agency, the US Army Corps of Engineers, NOAA fisheries, Fish and Wildlife Service, or FWS, the Coast Guard and DOD, the Department of Defense for various components of the project. Moving landward from the offshore wind turbines, we see the area of state waters. With few exceptions, states have jurisdiction over submerged lands within three nautical miles of the shoreline. The export cables, leaving the offshore wind farm, must travel through state waters to get on shore, which in turn triggers state approval requirements.
Finally, local municipalities may have to issue permits and approvals as well. For example, projects have to be consistent to the maximum extent practicable with any applicable, local waterfront revitalization plans under the Coastal Zone Management Act. Municipalities also often have to grant land rights for cables within streets and also issue additional permits and approvals for the onshore portion of the facility, things like highway work permits, for example. Now you might be thinking, "Well, that's a lot," but it should be easy to permit, right? Climate change is the biggest threat facing humanity and here we have a goldmine of renewable energy that we can tap. What's not to like? Well, as Dan's overview of the offshore wind litigation made clear, offshore wind is controversial in several ways. I'll touch on just a few of the concerns. First, evidenced by the Cape Wind's litigation, visual impacts can cause some concern. Cape Wind was only about four and a half miles from shore, which is much closer than the leased areas being developed today. At 20 miles from shore, the wind turbines are barely visible, even on a clear day.
Second, there is significant opposition from the fishing industry due to a fear that the wind farms will make offshore areas off limits to fishing and that development could have potential impacts on fish populations. The Fisheries Survival Fund litigation that Dan described is only the beginning of what is likely to be many lawsuits challenging offshore wind development in the coming years. Interestingly, the Block Island wind farm turbines have actually been found to service habitat, and the farm has become a popular place for recreational fishing. Third, adding wind farms to currently open waters may create maritime commerce and vessel transit challenges as well. For example, in the New York Bight, the area that is south of New York and east of New Jersey, the existing and planned lease areas lie outside of some of the busiest ports and harbors in the world. BOEM considers vessel transit lanes when it identifies potential wind energy and lease areas, and the Coast Guard is involved in addressing navigational safety, but concerns remain.
Fourth, there may be impacts uncertain kinds of marine mammals like whales and also on turtles due to construction-related noise impacts and vessel strikes. Potential impacts to these migratory species are difficult to measure because there are so many variables at play, including changing oceanic conditions and inter-annual variability, making it hard to understand the baseline against which potential impacts could be measured. There are some established mitigation practices like vessel speed restrictions and construction means and methods that help to address some of these potential impacts. Finally, the massive turbines may cause bird or bat impacts. The extent of these potential impacts are also difficult to measure as they are far out in the ocean. But the information we have indicates that the impacts of offshore wind turbines are actually much less than for onshore turbines.
Let's get into a little more detail regarding how BOEM goes about its business with respect to offshore wind. Generally, BOEM's process includes four distinct phases, planning, leasing, site assessment, and construction and operations. BOEM's first phase is planning. It's here that BOEM staff analyzes which areas, in federal waters, maybe suitable for offshore wind leasing. BOEM solicits the views of stakeholders as well as state and federal agencies, and we'll publish a call for information and nominations so that outside parties can provide their feedback and propose specific locations to nominate as a lease area. As a result of all this data gathering, BOEM may identify a wind energy area as suitable for development and ultimately identify a lease area to be auctioned off.
Before any such auction is held, BOEM will conduct an environmental assessment under NEPA that considers any impacts that may be caused by issuance of a lease. The next phase is leasing. In this phase, BOEM determines whether there's competitive interest in the identified lease area. If there is competitive interest, BOEM will publish notices in the federal register to inform the public of its intent to conduct an auction, to award that lease area. This is a real auction and they have been getting quite hot in the last five years. The winning bidder of the auction gets to enter the lease with BOEM and has an exclusive right to study the lease, and ultimately to propose a construction and operations plan for BOEM's consideration. In 2016, Equinor won its empire wind lease area for $42 million, a price that at that time was astonishing.
Up to that point, every existing BOEM lease combined, were one with a total of about $20 million. But just two years later, Equinor's $42 million winning bid looked like a bargain, because in 2018 developers bid $135 million for each of three lease areas off of Massachusetts. We expect BOEM to auction off eight new lease areas around the New York Bight by early 2022. And it will be very interesting to see what kind of values those lease areas command. But it is clear that serious developers will need to bring a lot of cash to the table when that auction takes place a few months from now. The third BOEM phase is site assessment. This is when the winner of a lease gets up to five years to characterize that lease area.
After BOEM approves a site assessment plan submitted by the lease holder, that is, the offshore wind developer, the lease holder can study its site in order to gain enough data to support the formulation of a construction and operations plan. That is, the developer's proposal for actually putting steel in the water. BOEM's fourth and final development phase is construction and operations. As I said, this involves BOEM's consideration of a proposal submitted by the developer as to exactly how and where it wants to build a wind farm, as well as how the project will be decommissioned at the end of its useful life. Once that plan is final, BOEM acts as lead agency for the required environmental review under NEPA and OCSLA. If the plan is approved, BOEM issues its record of decision, and once the final design and installation report is approved, the developer can begin construction. I want to go back for a moment to that first BOEM phase, leasing, to talk about the role that some states are playing during that phase.
As we discussed earlier, many of the Northeastern states have established goals or mandates for offshore wind development. New York is the leader right now, at nine gigawatts by 2035. To achieve those goals, states need to issue competitive solicitations to purchase offshore wind energy or to purchase the credits generated from the creation of that energy. Once that type of procurement contract between a state and a winning developer is finalized, the developer has an anchor tenant, so to speak, and can much more easily finance and build its offshore wind farm. But because that developer needs to have a federal lease from BOEM, before it can bid on a procurement or build an offshore wind farm and supply energy to a state's grid, at least some states continually pressure BOEM to identify and auction off new lease areas.
New York, through an entity called NYSERDA, which stands for the New York State Energy Research and Development Authority, has spent years studying the New York Bight and has identified the specific areas that New York believes would pose the fewest challenges for offshore wind development. Over the last several years, New York continually urged BOEM to open those areas for leasing. Katie and I were thrilled to help New York with those efforts. As Katie is going to discuss in a few minutes, the campaign for new lease areas waged by New York and New Jersey very recently succeeded.
Katie Ghilain Trudell:
That's right. Just two months ago, president Biden's BOEM, notified developers that by 2022, it will auction off up to eight new offshore wind lease areas in the New York Bight. Things are going to be busy. Now, I'd like to spend a few minutes discussing the state's role in permitting, using New York state as an example. States are empowered to permit transmission facilities for those parts of the offshore wind farms that must cross through state waters or state lands. Here, we're talking about the export cable, the onshore substation, and the interconnection point with the grid. In New York, this process is called Article VII, which is entirely separate from, but typically runs concurrently with the federal permitting that we spoke about a little bit earlier.
The Article VII process is designed to streamline the state and local permitting process in New York. Under Article VII of the New York Public Service Law, the general rule is that once a transmission facility obtains a certificate of environmental compatibility and public need, no other state or local permits are required. However, the transmission facility still must comply with the substance of local ordinances unless the Public Service Commission deems a particular ordinance to be unreasonably restricted. After a full environmental review conducted as part of that Article VII process, the PSC or Public Service Commission, must find that the transmission project serves a public need and minimizes adverse environmental impacts.
Right now, the total time associated with federal and state permitting of an offshore wind project is on the order of around three years at a minimum. The Biden administration and some states are considering ways to streamline the effort, but offshore wind projects are complex and there is no obvious way to materially speed up the permitting process, at least not without introducing new litigation risk. So we're going to have to wait and see if changes are made to allow for projects to be approved in under three years. The Vineyard Wind project off of Massachusetts is the first utility scale offshore wind project to be proposed since the abandonment of Cape Wind. The Vineyard team submitted its construction and operations plan to BOEM in December 2017 and BOEM issues...
The project off of Massachusetts is the first utility scale offshore wind project to be proposed since the abandonment of Cape Wind. The Vineyard team submitted its construction and operations plan to BOEM in December 2017 and BOEM issued the draft environmental impact statement one year later. But in mid 2019, the Secretary of the Interior ordered BOEM to pause its review of the project and to conduct a draft Supplemental EIS with a new cumulative impact scenario that considered the impacts from other offshore wind farms being proposed along the East Coast. Vineyard withdrew its COP in June 2020, just before the last presidential election. And in February 2021, just after President Biden's inauguration, Vineyard resubmitted its COP. And here's the big news, on May 11th, 2021, just three months ago, Vineyard Wind received its record of decision, marking the first time that a utility scale offshore wind project, in the nation, has cleared its final regulatory hurdle. Vineyard will soon begin installing what will be up to 84 wind turbines, starting approximately 12 miles offshore of Massachusetts. By 2023, the project is expected to deliver enough electricity to power 400,000 homes.
Katie Ghilain Trudell:
As I mentioned earlier, and as evidenced by the Vineyard Wind experience, progress was slow under the prior administration. In addition to Vineyard Wind's extended review, the lease areas that BOEM had proposed for the New York Bight were delayed by over two years. However, despite the glacial federal pace, states have been advancing the offshore wind industry by setting ambitious, renewable energy goals, procuring offshore wind energy, and supporting port and supply chain development. The state offshore wind targets currently total 30,000 megawatts of offshore wind energy by 2035. New York leads with a mandate to have 9000 megawatts of offshore wind capacity by that date. Today, we finally have an alignment of federal and state offshore wind goals. Already, this alignment has produced significant advances and momentum under the Biden-Harris administration. The administration's renewed focus on climate change was evident in the rejoining of the Paris Agreement on their first day in office.
Since then, the administration has set US commitments and goals to reduce net greenhouse gas emissions by 50 to 52% below 2005 levels in 2030, create a carbon pollution free power sector by 2035, achieve a net-zero emissions economy by 2050, and develop 30 gigawatts of offshore wind capacity by 2030, enough power to meet the demand of more than 10 million homes and avoid 78 million metric tons of carbon dioxide emissions. In keeping with these commitments, on May 11th, 2020 Vineyard Wind received its record of decision, as Dan mentioned, becoming the first commercial scale offshore wind farm in the nation. 800 megawatts of offshore wind energy are anticipated to start being delivered to Massachusetts in 2023. By July 4th, 2021, not even six months since the administration took office, BOEM had issued six notices of intent to prepare environmental impact statements for proposed East Coast offshore wind projects, totaling nearly 10 gigawatts of offshore wind energy, that included Ocean Wind on March 29th, Revolution Wind on April 29th, Empire Wind 1 and Empire Wind 2 on June 24th, Vineyard Wind South on June 29th, and Park City on June 30th.
This 10 gigawatts of offshore wind energy represents a third of the federal 30 by 2030 goal. And since July 4th, BOEM has issued another NOI. This one for the Kitty Hawk, north project, off of North Carolina and Virginia, which could support another 800 megawatts, a strong start indeed. BOEM also has been advancing toward establishing new lease areas on the East Coast and for the first time, along other US coasts. Let's start with the West Coast. On May 25th, 2021, BOEM announced that by 2022, it will lease about 400 square miles off of California. This is a historic first, for the West Coast. Then on July 28th, BOEM announced that it will publish a call for information and nominations for offshore wind projects off California's Central Coast, and what has been identified as the Morro Bay Call Area – East and West Extensions.
BOEM also announced that it formally designated that humbled wind energy area offshore, Northern California and will proceed with environmental review under NEPA. Moving to the Gulf of Mexico, on June 11th, BOEM published in the Federal Register an invitation for public comment on and expressions of interest in potential commercial wind energy leasing on the Gulf of Mexico Outer Continental Shelf. And now to the East Coast. On June 14th, 2021, BOEM issued a proposed sale notice announcing eight new potential lease areas in the New York Bight to be auctioned off in late 2021 or early 2022. On August 10th, BOEM announced the availability of a draft environmental assessment for the issuance of those lease areas, the issuance of the leases, the potential easements associated with each leased area, and the issuance of grants for subsea cable corridors and offshore converter collection platforms, that environmental assessment addresses the effects of lease and grant issuance as well as the site characterization and site assessment activities that are likely to occur as a result.
And let me just interject that this is what I was referring to a few minutes ago about how states pressure BOEM to open new lease areas. These eight new lease areas about to be auctioned off by BOEM were, in fact, first studied and identified by the state of New York around 2017 and were the subject of several, very detailed letters from New York and New Jersey to BOEM, urging the federal government to create and lease these areas.
Katie Ghilain Trudell:
And BOEM isn't the only federal agency that is working to advance the offshore wind industry. In June 2021, the Federal Energy Regulatory Commission or FERC, and the National Association of Regulatory Utility Commissioners announced the formation of a joint federal state task force on electric transmission. After all, 30 gigawatts of offshore wind energy isn't going to do much good if it can't get to the end users that need it. There are several schools of thought when it comes to transmission planning. At the moment, every offshore wind project has its own radio transmission line that connects the offshore wind, this area, to shore. However, onshore points of interconnection are limited as are certain cable routes, areas through narrow harbors and channels for example. Thus, as more offshore wind areas are leased and more projects are built, it's only going to get harder to bring the energy onshore.
Developers currently seem to favor this radio line approach so they have control over the entire project. They can ensure that the transmission lines will be ready to transmit energy as soon as the wind farm is up and running. And if a problem were to arise with the transmission line, it would be within their control to fix it. Another school of thought involves a backbone system whereby a third party would develop a backbone of transmission lines in an offshore area, and offshore wind projects in that area could then connect to the backbone system. This approach would reduce the number of cables and point of interconnection needed to connect multiple projects to shore, and it also would reduce the potential environmental impacts of installing more cables. However, this approach also requires a lot of planning and coordination that just hasn't yet occurred and it also increases the risks to developers because they do not then have the ability to control the operation and maintenance of the cables needed to get their energy to shore.
Now, there are some hybrid solutions as well, but those are the two main offshore transmission options that typically are being discussed. Now, onshore transmission is also a topic of conversation, both within and between the states. In New York, for example, the 2020 Accelerated Renewable Energy Growth and Community Benefit Act instructed the state to conduct a power grid study to help determine what transmission system investments will be necessary to reach New York's ambitious, renewable energy targets. Initial report was issued in January 2021, and we expect a lot more to come on that subject. So as you can see, it's been an exciting start to the Biden-Harris administration and the offshore wind industry is poised to have an exponential growth in the coming years.
Looking forward, we expect to see additional announcements from BOEM, for COP reviews and new lease areas. We also expect to see the administration advance efforts to streamline the federal permitting process, and considering all of the COPs that currently are starting the environmental review process, all of those notices of intent that I mentioned earlier, we expect to see approval of many utility scale offshore wind projects starting around 2023, quickly followed by steel in the water, and then operations starting around 2025.
There also is going to be an expedited development of an American supply chain for offshore wind. We already see increases in federal state and local funding, or economic incentives, to upgrade ports for offshore wind and to build new manufacturing facilities here that will roll steel and manufacture turbines, blades, and other equipment that's required by this industry. We also expect that more developers and more competition are going to converge in the offshore wind space, likely including every oil major. As we talked about before, these companies can read the writing on the wall regarding decarbonisation and they already know how to build and operate infrastructure out in the ocean. And finally, we expect that states are going to continue to accelerate and increase their procurements of offshore wind energy, and developers may even start to advance projects based only on power purchase commitments from massive private energy users, like a Google or an Apple, for example.
Katie Ghilain Trudell:
That concludes our presentation. We hope that you have learned a little bit about the history of offshore wind, the complicated permitting and approval processes involved, and the roles that the states and federal government play in advancing the offshore wind industry. This is an exciting time to be involved in this area of law, and we are grateful to be working at the forefront of this growing US industry. If you have any questions or would like to talk further, please do not hesitate to contact us. We'd love to hear from you. Thank you for watching.