US eyes second wind auction in Gulf of Mexico, but costs are 30% higher than Europe, says chief of RWE

Offshore wind development costs in the US are 30 percent higher than what they are in Europe, the CEO of Germany's biggest utility revealed, even as the US government considered launching a second auction for offshore wind projects in the Gulf of Mexico.

Speaking at the CERAWeek conference in Houston, USA, Markus Krebber, chief executive of RWE, said the US wind industry lacked maturity, and that offshore wind "has become very complicated," with inflation rampant and supply chain delays a constant problem. "It will take some time" to make the US offshore wind program more competitive, which should start to happen once supply constraints ease, Krebber said.

US and European officials have high hopes for wind power generation, but the sector has had a tumultuous few years because of rising costs and fulfilment delays across the supply chain.

RWE, which has projects both in its home nation of Germany as well as the US, is looking to ramp up investments in clean energy. The company's 2024-30 plan calls for investment of €55 billion net worldwide to create a green energy portfolio of 65 GW. About 40 percent of the €55 billion capex is slated to go towards wind and solar capacities.

Last year, the company bagged development rights to build an offshore wind farm off the coast of Louisiana in the Gulf of Mexico, an area more commonly home to oil rigs. But it offered one of the lowest rates in years.

Meanwhile, the US Department of the Interior has proposed a second offshore wind energy auction in the Gulf of Mexico. The proposed lease sale includes four areas offshore Louisiana and Texas, totaling 1,660 square km, with the potential to power 1.2 million homes.

The US aims to add 30 GW of offshore wind capacity by 2030, but does not have any large-scale offshore wind project in operation at the moment.