On August 29th, the Bureau of Ocean Energy Management (BOEM) held the first auction for offshore wind areas in the Gulf of Mexico. Sheppard Mullin’s preview of the auction can be accessed here. The auction concluded after just two rounds of bidding, with only the Lake Charles area off the coast of Louisiana being awarded. The two Texas areas available in the auction, Galveston I and II, received no bids.
Continue Reading Gulf of Mexico Offshore Auction Falls Short of Expectations
On July 21, 2023, the Bureau of Ocean Energy Management (BOEM) issued a Final Sale Notice (FSN) for offshore wind leases covering three areas on the Outer Continental Shelf (OCS) of the Gulf of Mexico (GOM). The auction will include a 102,480-acre area off the coast of Lake Charles, Louisiana and two areas off the coast of Galveston, Texas totaling nearly 200,000 acres. On August 29th, up to fifteen qualified bidders will vie to become the first offshore wind leaseholders in this high-potential region.
Continue Reading Previewing the Gulf of Mexico Offshore Wind Lease Auction
On February 13, 2023, the Internal Revenue Service (“IRS”) issued its “initial guidance”[1] regarding the Low-Income Communities Bonus Credit Program (the “Program”) established by the Inflation Reduction Act of 2022 (the “IRA”)[2] and codified under new Section 48(e) of the Internal Revenue Code (“IRC”) concerning “special rules for certain solar and wind facilities placed in service in connection with low-income communities.” The guidance makes strides to implement the Program required by the IRA, but it also leaves some gaps to be addressed in more guidance to come.
Continue Reading IRS Issues Guidance for Inflation Reduction Act Low-Income Bonus Tax Credits
The U.S. General Services Administration (“GSA”) recently released a Request for Information (“RFI”) seeking input from industry to help the federal government develop strategies for the procurement of carbon pollution-free electricity (“CFE”) in accordance with Executive Order 14057’s goal of achieving 100% CFE for the federal government by 2030. The RFI seeks to gather information about the “availability of CFE in the retail electricity market and ways for the Federal Government to incentivize additional production and delivery of CFE.”
Continue Reading GSA Issues Request for Information on Carbon Pollution-Free Electricity
The Green Hydrogen Economy is coming to California! 2023 is set to be a banner year for green hydrogen project development in California thanks to growing government commitment (see a brief timeline of key investments in 2022 below) and increasing demand.
Continue Reading Sheppard Mullin Launches California Green Hydrogen Readiness Assessment – How Prepared Are You and the State?
As previously discussed in our blog Inflation Reduction Act: Wage and Apprenticeship Requirements, the Inflation Reduction Act (the “IRA”) restructured the tax credit system associated with qualified clean energy projects. In particular, to receive the full value of various tax credits, companies must now pay the prevailing wage rates and employ a certain number of registered apprentices in the construction, alteration, and/or repair of qualified clean energy facilities or projects as defined under the Code.
Continue Reading Inflation Reduction Act: Prevailing Wage and Apprenticeship Requirement FAQs and Key Takeaways from the Initial Guidance from the Treasury and IRS
The dust has settled on the Bureau of Ocean Energy Management’s (BOEM) first west coast auction for federal offshore wind lease areas. The California auction for the Morro Bay and Humboldt Call Areas brought an aggregate $757,100,000 to federal coffers at a $2,028 per acre value (with variances between the areas discussed below). This per acre value is well below the results of the other BOEM auctions of 2022, New York Bight (approximately $9,000 per acre, the highwater mark in the U.S.) and Carolina Long Bay (approximately $2,800 per acre). The final figure places the final result firmly within, but
Continue Reading California’s First Offshore Wind Auction Finalized – Key Takeaways
The eyes of the offshore wind sector are turning with excitement to the west coast of the United States today as the Bureau of Ocean Energy Management (BOEM) conducts a scheduled mock auction for the Morro Bay and Humboldt Call Areas leading into the live auction tomorrow, December 6th.
Continue Reading Market Conditions Among Factors Adding Variability to Potential California Offshore Lease Outcomes
President Joe Biden signed into law the Inflation Reduction Act of 2022 (“HR 5376”) (the “IRA” or the “Act”), on August 16, 2022.
Continue Reading Inflation Reduction Act: Wage and Apprenticeship Requirements
After the landmark prices received for eight offshore wind leases in the New York Bight, and with great anticipation for the upcoming December 6, 2022, lease auction for the Humboldt and Morro Bay Wind Energy Areas (WEAs) off the coast of California, the U.S. Department of Interior’s Bureau of Ocean Energy Management (BOEM) is turning its sights to the Gulf of Mexico. The Biden Administration’s announced goal of developing thirty (30) gigawatts (GW) of offshore wind energy by 2030 now includes two WEAs in the Gulf of Mexico with the potential of producing up to 3 GW of
Continue Reading Offshore Wind Comes to the Gulf of Mexico
On October 21, 2022, the U.S. Bureau of Ocean Energy Management (“BOEM”) published a Final Sale Notice (“FSN”) for commercial leasing for wind power on California’s Outer Continental Shelf (“OCS”). Specifically, the FSN announces a list of eligible bidders, deadlines, lease stipulations, and financial terms and conditions for an auction of five leases within the Humboldt Wind Energy Area (“WEA”) and Morro Bay WEA. We highlighted these elements of the FSN and discussed bid credits in prior blog posts. Here, we summarize several aspects of the FSN which stem from the California Coastal Commission’s consistency determinations for both WEAs.
Continue Reading California Offshore Wind Lease Sale Announced by Bureau of Ocean Energy Management
One of the most noteworthy features of the October 18th Final Sale Notice (FSN) for the PACW-1 offshore lease auction – which will be the first west coast auction held by the Bureau of Ocean Energy Management (BOEM) – is the availability of “multi-factor” bid credits. The multi-factor approach will allow bidders to earn credits for activities BOEM hopes to stimulate, including making commitments to domestic workforce training and supply chain development as well as entrance into community benefit agreements (CBAs) addressing the impacts of offshore development on local stakeholders. Up to 30% of the cash value of their bid
Continue Reading Bid Credits Intended to Stimulate Local Coordination and Development in Upcoming California Lease Auction Add New Wrinkle to Bid Strategies
On October 18, 2022, the Department of the Interior announced that the Bureau of Ocean Energy Management (“BOEM”) will hold an auction to sell five offshore wind energy leases in federal waters off the California coast, with two off the coast of Humboldt and three off the coast of Morro Bay. PACW-1 is the first sale of offshore wind leases on the west coast of the United States, and the first to support the development of floating offshore wind projects anywhere in the US. The auction follows the record-breaking New York Bight auction and the Carolina Long Bay auction, both
Continue Reading California Offshore Wind Auction
Offshore wind development off the California coast took another step closer to reality on August 10, 2022 with the California Energy Commission’s release of a report setting maximum feasible capacity and megawatt goals for 2030 and 2045. The report constitutes a milestone in the planning process prescribed by AB 525, which requires that the Commission “evaluate and quantify the maximum feasible capacity of offshore wind to achieve reliability, ratepayer, employment, and decarbonization benefits” for 2030 and 2045.
Continue Reading California Energy Commission Releases Milestone Offshore Wind Energy Report and Sets Maximum Feasible Capacity and Megawatt Planning Goals for 2030 and 2045
On August 7, 2022, the Senate passed the Inflation Reduction Act of 2022 (H.R. 5376) (the “Reconciliation Bill”) on a party line vote with the deciding vote cast by the Vice President. The Senate’s passage of the Reconciliation Bill likely satisfies the requirements for a Proposed Change in Tax Law, as defined under most tax equity financing documents. However, in general, those agreements require that only adverse Proposed Changes in Tax Law be reflected in the Base Case Model in advance of a Funding Date. In general, changes that affect the tax capacity of an investor are not within the
Continue Reading Tax Law Changes in the Inflation Reduction Act of 2022 (H.R. 5376)
U.S. state and federal lawmakers, as well as federal regulators, are increasingly focusing on the role of blockchain and distributed ledger technology in ongoing efforts to combat climate change and to facilitate the transition from carbon-based fossil fuels.
Continue Reading Lawmakers and Regulators Examine Role of Blockchain Technology in Energy Transitions