In 2021, the Biden Administration set a goal of deploying 30 gigawatts (“GW”) of federal offshore wind projects by 2030, and in 2022, the U.S. Department of the Interior (“DOI”) set an additional goal of deploying 15 GW of floating offshore wind by 2035. The DOI’s Bureau of Ocean Energy Management (“BOEM”), which administers the federal government’s offshore oil and gas and renewable energy leasing programs, has now approved half of the capacity needed to achieve the 30 GW by 2030 goal, after issuing the National Environmental Policy Act (“NEPA”) Record of Decision (“ROD”) for the Maryland Offshore Wind project in September 2024, making it the nation’s 10th federally approved commercial-scale offshore wind project to date. All 10 are located on the Atlantic outer continental shelf (“OCS”) where the offshore wind industry is the most developed: (1) Vineyard Wind 1; (2) South Fork Wind; (3) Ocean Wind 1; (4) Revolution Wind; (5) Coastal Virginia Offshore Wind; (6) Empire Wind; (7) Sunrise Wind; (8) New England Wind 1 and 2; (9) Atlantic Shores South; and now (10) Maryland Offshore Wind. Maryland Offshore Wind is the only one of those 10 total federally approved projects that has not yet had its Construction and Operations Plan (“COP”) approved by BOEM, which once issued authorizes the commencement of construction activities, sometimes subject to additional requirements imposed by the agency. So far, BOEM has approved five COPs this year (in addition to updating the conditions of COP approval for Revolution Wind), bringing BOEM’s total to nine COP approvals issued to date, advancing towards the agency’s current goal to complete the review of 16 COPs by 2025 to achieve the 30 GW by 2030 goal.

Although federal offshore wind development started to pick up this year, so did opposition to the burgeoning industry, along with inevitable perils that come with developing a new frontier:

A. Permitting offshore wind projects is time-consuming. The time required to complete federal permitting is averaging just under 4 years from start to finish, with the potential to send projects into the red before construction even begins. Of the 10 total projects which have been federally approved to date, seven are “FAST-41 Covered Projects” (Sunrise, New England, Empire, Coastal, Revolution, South Fork, and Vineyard) with exact permitting data available for each of the 12 (maximum) required federal permits, as well as a precise timeframe as to how long the entire federal permitting process took. Based on the FAST-41 data for those seven projects which have fully completed all federal permitting, the total time it took to obtain up to all 12 permits – including all time spent planning and in progress, as well as any pauses, delays, and extensions – averaged around 3 years and 8 months (approximately 44.3 months). Unless otherwise noted below, each of those seven projects required:

1. NEPA Final Environmental Impact Statement (“EIS”) (finalized by issuance of NEPA Joint ROD by DOI’s BOEM and the Department of Commerce (“DOC”), and in some cases the Department of Defense (“DOD”) must also co-sign);

2. COP (generally approved two to five months after NEPA ROD issuance);

3. National Historic Preservation Act § 106 Review;

4. OCS Air Permit (six of the seven completed FAST-41 projects required);

5. National Park Service Permit (only one, Sunrise, required for a Right-of-Way and Special Use Permit for access through National Seashore Waters);

6. Clean Water Act (“CWA”) § 402 and National Pollutant Discharge Elimination System Permit (only one required);

7. CWA § 404 and Rivers and Harbors Act of 1899 § 10 Permits;

8. CWA § 408 Permit (only three required);

9. Endangered Species Act (“ESA”) Consultation with DOI’s U.S. Fish and Wildlife Service;

10. ESA Consultation with the DOC National Oceanic and Atmospheric Administration’s (“NOAA”) National Marine Fisheries Service (“NMFS”);

11. Marine Mammal Protection Act Incidental Take Authorization from NMFS; and

12. Magnuson-Stevens Fishery Conservation and Management Act § 305 Essential Fish Habitat Consultation.

B. It remains an open question whether projects canceled by developers can later be sold without the assignee having to restart the federal permitting process; whether all federal approvals are assignable; and if vacating state orders approving federal offshore wind projects and associated state-issued easements nullifies that project’s federal permits.

1. On October 31, 2023, Ørsted A/S’s (“Ørsted”) Board of Directors decided to cancel both Ocean Wind 1 and Ocean Wind 2 – after all permitting had been completed for Ocean Wind 1 (with BOEM approving the project’s COP in September 2023). Accordingly, on February 29, 2024, BOEM suspended the Ocean Wind 1 lessee’s (Ocean Wind LLC, an Ørsted subsidiary) commercial wind lease for two years. On May 25, 2024, the State of New Jersey and its New Jersey Board of Public Utilities (“NJBPU”) entered a settlement agreement with Ørsted authorizing the distribution of Ørsted’s $200 million in escrow funds amongst the settlement parties and entering mutual limited releases discharging each party from liability for claims concerning or arising out of the project cancellations. On August 14, 2024, the NJBPU formally vacated its two “award orders” approving the Ocean Wind 1 and 2 projects, as well as the four easements it granted Ocean Wind 1 on property owned by Ocean City or the County of Cape May.

2. The Ocean Wind 1 and 2 project cancellations also followed the filing of County of Cape May v. United States, No. 1:23-cv-21201 (D.N.J.), a legal challenge to Ocean Wind 1 that was just dismissed without prejudice on November 20, 2024, after all parties agreed to dismissal (for different reasons) within their briefs based on the project’s cancellation (although plaintiffs originally argued the COP approval and federal permits remained justiciable final agency actions). Notably, plaintiffs also used their reply in support of their motion to amend the complaint as an opportunity to assert that “the federal permits, without the state approvals, are no longer operative and, in the event the Company sold the Project, any new developer would have to begin the permitting and approval process all over again.” Plaintiffs further claim the federal defendants agree with their position, citing to BOEM’s prior statement that “even if and when the federal suspension is lifted – the cancellation of NJBP[U]’s easements and permit precludes construction of the project” and that without easements “Ocean Wind 1 cannot proceed.” On November 7, 2024, intervenor-defendant lessee Ocean Wind LLC filed its sur-reply, therein preserving its positions that: Ocean Wind 1 and all of its approvals and permits can be sold to another entity; all such federal entitlements remain valid and in effect; plaintiffs “mischaracterize the Federal Defendants’ position” as to the effect of the NJBPU’s actions; and the NJBPU cancellation orders and settlement have no bearing on “and do not purport to have any impact” on the federal entitlements obtained for Ocean Wind 1. The U.S. District Court for the District of New Jersey did not address any of these arguments before dismissing the case.

C. As more projects are being approved and constructed, a new concern is whether the developer will be able to secure offtake agreements for electricity sales at all or on economic terms.

1. On January 3, 2024, Equinor Renewables Americans (“Equinor”) and bp America (“bp”) announced cancellation of the offtake agreements previously entered with the New York State Energy Research and Development Authority (“NYSERDA”) for their prior joint ventures Empire Wind 2 (which Equinor now has full ownership of following a stake “swap transaction”) and Beacon Wind (which bp now has full ownership of), after announcing they did not plan to develop the projects unless they could meet return thresholds of 6-8%. The offtake cancellations followed the New York State Public Service Commission’s October 2023 rejection of developers’ petitions for financial relief, unsuccessfully seeking to revise the projects’ Offshore Wind Renewable Energy Certificate (“OREC”) (i.e., a tradable commodity representing the environmental benefits of producing offshore wind energy) Purchase and Sale Agreements (“PSAs”) to reflect current commercial conditions and increased costs from inflation which rendered the existing terms unviable. NYSERDA announced the Joint Termination Agreements terminating the OREC PSAs for Empire Wind 2 on January 5, 2024, and for Beacon Wind on January 25, 2024. However, that offtake cancellation did not prevent BOEM from approving the COP for Empire Wind 1 and 2 on February 2, 2024. Equinor noted that “Empire Wind 2 will be further matured for future solicitation rounds” (i.e., competitive “calls for proposals from offshore wind developers to deliver offshore wind energy to New York State”) such that the project could still potentially enter an OREC PSA with NYSERDA under different terms at some point in the future.

2. In June of 2024, Equinor’s Empire Wind 1 and Ørsted’s Sunrise Wind (now solely owned by Ørsted as of July 2024 following its acquisition of Eversource’s 50% partnership stake) entered OREC PSAs with NYSERDA, each with a strike price of $155 per megawatt-hour (“MWh”) and $146 per MWh, respectively. This followed NYSERDA’s February 2024 announcement that Empire Wind 1 and Sunrise Wind were the provisional winners of New York’s fourth offshore wind solicitation (“NY4”), held in November of 2023.

D. This year has presented a lack of competitive interest in and eligible bidders for federal offshore wind lease sales in less developed OCS regions like the Gulf of Mexico and Oregon, as well as legal challenges to the environmental reviews for those new lease areas.

1. BOEM initially published a Proposed Sale Notice for what would have been the second Gulf of Mexico wind lease sale on March 21, 2024, and originally scheduled that auction for September of 2024. But on July 26, 2024, BOEM canceled that lease sale due to a reported lack of competitive interest after only one bidder was deemed qualified to bid.  However, on February 16, 2024, Hecate Energy Gulf Wind LLC (“Hecate Energy”) submitted an unsolicited request for two commercial wind leases in BOEM’s Wind Energy Area Options C and D offshore southeast Texas (the “RFCI Areas”). Simultaneous with its cancellation of the second Gulf of Mexico lease sale, BOEM published a Notice of Potential Commercial Leasing for Wind Power Development on the Gulf of Mexico OCS – Request for Competitive Interest (“RFCI”), seeking comments and input on whether there is competitive interest in commercial offshore wind energy development in the RFCI Areas requested by Hecate Energy. In response, Invenergy Gulf of Mexico Offshore submitted its Indication of Interest in the Gulf of Mexico RFCI Areas on September 11, 2024, “express[ing an] interest in acquiring a commercial wind lease within the RFCI Areas . . . with the intention of demonstrating commercial and competitive interest, and encouraging BOEM to proceed with the competitive leasing process for the RFCI Areas.”

2. Then, on September 27, 2024, BOEM canceled would have been the first-ever Oregon OCS wind auction scheduled for October 2024. Earlier that same morning, Oregon Governor Tina Kotek issued a letter to BOEM requesting the agency “halt all current leasing activities off the coast of Oregon and terminate the current auction” and “withdraw[ing Oregon] from the BOEM Oregon Intergovernmental Renewable Energy Task Force in order to ensure that Oregon’s interests are fully protected, and that there is adequate time to complete [the] state Roadmap with engagement and participation of key constituencies and the public.” The Oregon auction cancellation also followed the filing of Confed. Tribes of Coos, Lower Umpqua & Siuslaw Indians v. BOEM, No. 6:24-cv-01558 (D. Or.), on September 13, 2024, where four bands across three Tribes (federally recognized as a single entity) with ancestral lands along the Oregon coast challenged BOEM’s environmental review for the Oregon OCS auction. On November 19, 2024, defendant BOEM filed an unopposed motion for extension of time to file its answer to plaintiff’s complaint. Therein BOEM notes it “requests the extension because it is not clear whether it will be necessary to litigate this case” since the agency postponed the auction indefinitely and because “additional time [is needed] for the parties to discuss whether the case will go forward[.]” BOEM admits it is not likely that the sale will go forward within the next year, but notes plaintiff has not yet dismissed the case “[g]iven that there is some uncertainty[.]” On November 25, 2024, the U.S. District Court for the District of Oregon granted the request and extended the response deadline to January 17, 2025.

E. More and more lawsuits are being filed by Tribes, local community members and private associations, as well as environmental groups, which add time and increase costs that could result in developers ultimately canceling offshore wind projects. The best example of these lawsuits are the numerous challenges to Vineyard Wind, the first federal offshore wind farm in the U.S. At least two such challenges to Vineyard Wind remain pending in the U.S. Court of Appeals for the First Circuit, and one could be heard next by the U.S. Supreme Court.

1. This year, the First Circuit upheld the U.S. District Court for the District of Massachusetts’ dismissal of two challenges to Vineyard Wind. Melone, et al. v. Coit, et al., No. 23-1736, 100 F.4th 21 (1st Cir. Apr. 25, 2024) (affirming dismissal), aff’g, Allco Renewable Energy Ltd., et al. v. Haaland, et al., No. 21-cv-11171 (D. Mass. June 30, 2022, Aug. 4, 2023); Nantucket Residents Against Turbines, et al. v. U.S. BOEM, et al., No. 23-1501, 100 F.4th 1 (1st Cir. Apr. 24, 2024) (affirming dismissal), aff’g, No. 21-cv-11390 (D. Mass. May 17, 2023), pet. filed (U.S. Sept. 23, 2024). The Nantucket Residents Against Turbines’ petition for writ of certiorari to the U.S. Supreme Court was docketed on September 25, 2024, and remains pending.

2. Last year, the District of Massachusetts dismissed two other challenges to Vineyard Wind; both were appealed to the First Circuit and are awaiting decisions after back-to-back oral arguments were held before the same three-judge panel on July 25, 2024. Responsible Offshore Development Alliance, et al. v. US DOI, et al., No. 22-cv-00237 (D.D.C. June 27, 2022), transferred, No. 22-cv-11172 (D. Mass. Oct. 12, 2023), appeal filed, No. 23-2051 (1st Cir.) (awaiting decision); Seafreeze Shoreside, Inc., et al. v. DOI, et al., No. 1:22-cv-11091 (D. Mass. Oct. 12, 2023), appeal filed, No. 23-1853 (1st Cir.) (awaiting decision). In Seafreeze, the plaintiffs filed another citation of supplemental authorities on October 31, 2024, requesting the October 2024 suspension order issued by the DOI’s Bureau of Safety and Environmental Enforcement (“BSEE”) after a Vineyard Wind turbine generator blade collapsed into the ocean over this summer be added to the administrative record and further asserting a stay of BOEM’s Vineyard Wind COP approval is warranted based on that new suspension order. On November 13, 2024, BOEM filed its Response Letter, therein conceding the October 2024 BSEE suspension order issued to Vineyard Wind LLC “continues to prohibit power production from the facilities and or installation of additional blades on its lease, with limited exceptions, as BSEE continues its oversight and investigation into the July 13, 2024, turbine generator blade failure” but concluding the suspension order does not support Seafreeze’s stay request because the COP approval took effect so long ago a stay is inappropriate, BSEE’s suspension provides no implication or indication that Seafreeze was ever at risk of irreparable injury let alone now, and the BSEE orders are not relevant to the resolution of Seafreeze’s lawsuit brought under the Administrative Procedure Act such that supplementation of the record should not be allowed.

F. Gaps in the domestic supply chain are and will continue to stall project development unless remedied. While the DOI oversees federal renewable energy leasing, the Department of Energy (“DOE”) is the lead agency for domestic supply chain development (“SCD”).

1. On September 20, 2023, the DOI, DOE, DOC, Department of Transportation, and the East Coast States of Connecticut, Maine, Maryland, Massachusetts, New Hampshire, New Jersey, New York, North Carolina, and Rhode Island entered a five-year Memorandum of Understanding (“MOU”), unless extended beyond or previously terminated, regarding offshore wind supply chain collaboration, aiming to expand supply chain elements including manufacturing facilities, port capabilities, workforce development in a coordinated and sustainable manner, in part by providing a framework for states to incentivize the development of U.S. offshore wind vessels and domestic steel production.

2. DOE’s National Renewable Energy Laboratory (“NREL”) research shows the following resources will be required to deploy 30 GW of offshore wind energy by 2030: 2,100 wind turbines; 2,100 foundations; 6,800 miles of cable; 12,300-49,000 full-time equivalents average annual workforce; and a whole new fleet of offshore wind support vessels. As of May 31, 2024, NREL identified the U.S. supply chain as having the following (either active or announced): 18 offshore wind ports and port operations/logistic hubs (5 operational for offshore wind activities + 13 planned); 16 manufacturing supply chain facilities for secondary steel, steel plates, monopiles, foundation platforms, towers and transition pieces, or subsea/export/array/high voltage onshore cables (8 operational + 8 planned); and 1 operational project substation.

G. Large-scale interconnection and offshore transmission networking efforts are only in the early planning stages. DOE is also leading transmission and interconnection research studies specific to each OCS region:

1. In September 2023, DOE and DOI announced their Atlantic Offshore Wind Transmission Action Plan, and in March 2024, DOE issued its Atlantic Offshore Wind Transmission Study.

2. DOE’s Pacific Northwest National Laboratory (“PNNL”) started its 20-month West Coast Offshore Wind Transmission Study in May 2023, following PNNL’s February 2023 West Coast Offshore Wind Transmission Literature Review and Gaps Analysis.

3. In July 2024, DOE’s NREL issued its Gulf of Mexico Offshore Wind Transmission Literature Review and Gaps Analysis: Environmental Considerations, Community Readiness, and Infrastructure.

H. Developers cannot avoid legal exposure to the risk of policy changes after their investments have already been made. President-elect Trump has publicly announced his opposition to offshore wind, such that it is unclear what will happen to the 10 federally permitted projects, or any others in the pipeline, once his administration begins on January 20, 2025.

Besides these expansive and emerging issues, federal and state agencies have taken multiple actions this year to further define the OCS renewable energy regime and create a framework for increased interagency work on federal offshore wind projects. BOEM and BSEE finalized updates to their offshore wind regulations in their Renewable Energy Modernization Rule, which went into effect on July 15, 2024. BOEM entered a brand-new Renewable Energy (“REn”) Memorandum of Agreement with BSEE this year, as well as four new MOUs with federal agencies, including the DOD, and a two-year MOU with the State of Maryland (the second of its kind following a prior MOU between BOEM and the State of California in effect from 2016-2021). The DOI’s BOEM and the DOC’s NOAA jointly issued their North Atlantic Right Whale and Offshore Wind Strategy, an initial step to evaluate and mitigate the effects of offshore wind development on North Atlantic right whales. BOEM also issued its new 2024-2029 Renewable Energy Leasing Schedule which started May 1, 2024, initially planning for 12 offshore wind lease sales from 2024-2028 and for the first time ever scheduling OCS wind auctions for Hawaii and a U.S. Territory (which may include American Samoa, Guam, Northern Mariana Islands, Puerto Rico, and the U.S. Virgin Islands). BOEM held two of the four lease sales it planned for this year and began using a new auction system. The second Central Atlantic auction was held in August 2024, and the first-ever Gulf of Maine auction was held in October 2024. These two 2024 lease sales proved the use of bidding credits in multiple factor auctions is becoming the norm. The Central Atlantic lease sale resulted in $23+ million total bidding credits for workforce training, domestic SCD, and fisheries compensatory mitigation (“FCM”). The Gulf of Maine lease sale resulted in $5.4 million total bidding credits also for workforce training, SCD, and FCM.

Most recently, on November 13, 2024, BOEM announced availability of its Draft Programmatic EIS for Expected Wind Energy Development in California, in anticipation of its second offshore California wind auction currently planned for 2028. That Draft EIS’s 90-day public comment period started November 14th and will close on February 12, 2025, unless extended, during which time BOEM will also hold two virtual public meetings. Finally, the federal government is also taking steps towards its 15 GW of floating wind by 2035 goal. The 2024 Gulf of Maine lease sale was the first Atlantic OCS region auction for floating offshore commercial wind leases. And on August 19, 2024, BOEM issued the nation’s first floating offshore wind research lease to the State of Maine for a maximum of 12 floating wind turbine generators.

For further questions regarding these developments, contact Liskow attorneys Jana Grauberger and Kyrie Buffa and visit our Wind Energy and Federal Offshore Regulatory practice pages.

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