A Louisiana company was awarded leases to four tracts Tuesday in Texas' first open bidding for offshore wind power in the Gulf of Mexico.
Wind Energy Systems Technology, already developing a wind farm eight miles off of Galveston, Texas, was the only bidder for the tracts. A British company had expressed interest but later indicated it wasn't prepared to make an offer, said Texas Land Commissioner Jerry Patterson.
"The Texas Wind Rush is on, and the pioneers are staking their claims," Patterson said in a statement. "And wherever there are pioneers, the settlers soon follow."
Two other offshore wind farm leases were previously awarded by the state of Texas, but not through competitive bidding. Land Commissioner Jerry Patterson said he decided this time to treat the wind farm leases like an oil or gas lease sale and allow the market to place a value on the tracts
Next round expected in a year
Patterson said he expects to hold bidding for more offshore wind power leases in about a year. The Texas General Land Office oversees development of territory up to 10 miles from the state's coastline.
"If you're in the wind business, whether it's onshore or offshore, Texas is the place to be," Patterson said.
Though it's not clear why more companies didn't bid on the offshore tracts, it may be that many are busy with wind power projects on land in Texas, said Christine Real de Azua, spokeswoman for the American Wind Energy Association.
Texas is now the nation's top producer of wind power, according to the association. The state had 3,352 megawatts of wind-generating capacity installed by the end of June, ahead of California's 2,376 megawatts.
Wind Energy Systems, based in New Iberia, La., will pay $21,000 per tract for development rights.
Schools to get revenue
When the wind farms are operating, the company will pay the state's Permanent School Fund a minimum of $132 million over the 30-year life of the leases. The state is to make even more money from a percentage of the company's energy production revenue.
The research and development stage will last approximately four years
Patterson dismissed the idea that offshore wind turbines will hurt flocks of migrating birds or be an eyesore for coastal visitors. Birds tend to fly higher than the wind equipment and, at eight miles offshore, the giant turbines can't be seen by tourists on land, he said.
And if they are in view, he said, "I don't think it looks all that bad."
“This was the first, but won’t be the last,” Patterson said of the tract bidding. “The future of offshore wind power in the U.S. is right here in Texas, and the Land Office is open for business.”