A recent unexpected proposal from a Chicago-based firm has rekindled excitement about the possibility of wind energy in the Gulf of Mexico. Hecate Energy, primarily recognized for its land-focused solar initiatives, revealed its intention to construct a wind farm comprising 133 turbines in the Gulf shortly after the Biden administration called off the region’s second lease auction in July, citing insufficient interest from potential bidders. This cancellation followed a lackluster initial auction in 2023, where only one bid was placed by the German firm RWE for a site south of Lake Charles, Louisiana, while two areas near Galveston, Texas, received no bids at all.
Hecate pointed out in its application to the Bureau of Ocean Energy Management (BOEM), the overseeing agency for offshore wind initiatives in federal waters, that the Gulf’s offshore wind sector “could use a positive headline.” By moving forward with Hecate’s application, BOEM could foster “momentum” in a region often neglected by offshore wind projects, according to the submission. The initiative appears to be bearing fruit, as Invenergy, another Chicago-based energy company, has also submitted a proposal for the same areas in the western Gulf, located approximately 25 miles from Galveston. In a letter of interest addressed to BOEM last September, Invenergy’s proposal included up to 140 turbines with an anticipated capacity of around 2,500 megawatts, enough to supply energy to roughly half a million households; Hecate’s plan would potentially yield about 2,000 megawatts.
Cameron Poole, the energy and innovation manager for Greater New Orleans, Inc., expressed optimism, stating that suddenly the Gulf is becoming a focal point again. Although the region may face challenges such as more intense storms and fewer energy consumers compared to the East Coast, which has dominated the U.S. offshore wind scene, Poole believes these new ventures are indicative of growing interest. “These new proposals showcase that developers are not deterred by the hurdles,” he noted.
Currently, BOEM is observing if additional companies will present projects for these areas, which cover approximately 142,000 acres. Although these specific locations differ from the areas previously designated for auction in July, BOEM identified them as feasible for offshore wind development back in 2021. While a competitive lease sale is expected to be initiated, no specific timeline has been given yet, as stated by a BOEM spokesperson this week.
James Kendall, the director of BOEM’s Gulf region, highlighted that interest from industry leaders like Hecate and RWE underscores the commercial potential within the Gulf area. Founded in 2012, Hecate Energy has successfully developed more than 47 solar and energy storage projects across the U.S. and Canada, in addition to a wind farm project located in Jordan. Repsol, a minority investor in Hecate, is an oil and gas firm with offshore extraction rights in the Gulf as well as in Alaska.
Invenergy, acclaimed for its expansive portfolio of 74 solar and energy storage initiatives and 118 land-based wind projects across North America, Europe, and Japan, is also in the process of developing offshore wind projects off the New Jersey and California coasts.
Despite trailing behind the East Coast, the Gulf region holds the promise of becoming a substantial wind energy source. The National Renewable Energy Laboratory estimates the Gulf’s capability of generating over 500,000 megawatts of offshore wind energy annually. This output surpasses the energy requirements of all five Gulf Coast states combined and exceeds the estimated offshore wind capacity potential of both the Great Lakes and the Pacific Coast.
Though initial enthusiasm for Gulf development among some of the largest offshore wind companies has diminished as the sector’s overall progress in the U.S. has slowed down in recent years, the decline can be attributed to various factors, such as supply chain disruptions, elevated interest rates, persistent inflation, and a scarcity of skilled labor.
States like Louisiana and Texas have already made strides in the offshore wind sector, even in the absence of active turbines in the Gulf. Louisiana companies with established connections to offshore oil and gas have been pivotal in the wind energy field for close to a decade. In 2016, six firms from Louisiana contributed designers, engineers, and other specialists to help construct the U.S.’s first offshore wind farm, which featured five turbines off the coast of Rhode Island.
Approximately 25% of all offshore wind contracts awarded in the U.S. have gone to companies based in the Gulf, resulting in about $1 billion in investments directed to the region’s ship and metal fabrication industries in recent years, according to the Oceantic Network, an industry trade organization.
Louisiana has also authorized partnerships with two companies for the development of small-scale wind farms within state-managed waters near Cameron Parish and Port Fourchon, the largest oil and gas facility in the Gulf.
On the political front in Texas, while it boasts higher wind speeds, state leaders have shown strong resistance to offshore wind initiatives. RWE, the only entity holding a federal lease in the Gulf, has sought regulatory support to enhance leasing options close to Louisiana, as it is the only state in the Gulf expressing an interest in offshore wind policies.
Despite the state’s apparent reluctance, major Texas cities are exhibiting an eagerness to embrace offshore wind. Hecate’s proposal highlights that Texas’s four largest cities—Houston, San Antonio, Dallas, and Austin—have developed climate action plans aiming for net-zero emissions by 2050. Collectively, these cities encompass around 6 million residents.
Moreover, the offshore wind power market is not restricted solely to urban areas. Hecate indicated a potential strategy to supply wind energy to oil and gas firms interested in making their operations greener. The company also aims to tap into the emerging “green” hydrogen market, produced by using renewable energy sources to break water molecules apart. Unlike fossil fuels like coal or gas, hydrogen combustion does not emit greenhouse gases.
Numerous federal and state grants are being allocated to green hydrogen projects. The Biden administration, in collaboration with Louisiana, has pledged approximately $75 million towards advanced green hydrogen projects in southern Louisiana. A $426 million plant aimed at green hydrogen production is also in the pipeline in Ascension Parish, approximately 50 miles from New Orleans, and is benefiting from governmental support. Hecate has pointed to these projects as current evidence of a vigorous market for the company’s proposed wind farm and other offshore installations.
“It’s still an emerging landscape with only a few wind development projects in the Gulf,” Poole remarked, alluding to the major RWE lease and two smaller initiatives envisioned in Louisiana waters. “However, we remain hopeful about offshore wind prospects. It’s not a matter of ‘if’ but ‘when’.”