The Island-owned energy cooperative Vineyard Power, along with a partner, was awarded a provisional lease Thursday to develop an offshore wind farm in federal waters off the Vineyard. The federal Bureau of Ocean Energy Management announced the lease following an online auction Thursday morning. Vineyard Power and its partner Offshore MW bid $166,000 for the right to lease just over 166,886 acres about 12 nautical miles south of the Island. One other lease was awarded Thursday to a separate bidder, RES America Development Inc., for a little over $281,000. Four lease areas were up for bid.

“This is a huge milestone,” Vineyard Power president Richard Andre told the Gazette following an announcement by the Department of the Interior. “We’ve had all these little steps we have taken, and now this one truly feels like a real sense of accomplishment.”

The bid next goes through a process that includes review and approval by the U.S. Department of Justice. Once that is cleared, Vineyard Power and Offshore MW will have 45 days to pay the first year’s $500,000 annual rent, and then will spend the next four and a half years developing a detailed plan for construction. There are still many technical steps and hurdles to clear, including an environmental impact statement and state legislation that would clear the way for power purchase agreements with utility companies. The power purchase agreements are needed to obtain financing.

The nonprofit Island energy cooperative was formed five years ago and has about 1,400 members with an ultimate goal of 8,000 members. To date the cooperative has focused largely on solar installation sites around the Island and on planning for the wind farm leasing venture. Mr. Andre said early plans call for building a wind farm of 350 to 400 megawatts, or about 60 to 65 turbines. Vineyard Power’s share would be approximately 40 megawatts or six or seven turbines, he said.

The 1,200-square-mile Massachusetts wind energy area begins 12 nautical miles from shore and is divided diagonally into four zones. Developers bid on 25-year leases on one or more of the zones at the online auction Thursday. Although there were many qualified bidders, in the end only two bidders participated, Mr. Andre said.

The process was costly and involved an advance deposit of about $450,000 per lease area. Vineyard Power and Offshore MW put down a deposit for two preferred areas and in the end were awarded one. Mr. Andre said the online auction involved computerized tokens for qualified bidders and began at 8:30 a.m. Thursday. “It went two rounds, extremely quick,” he said. “We were announced the winner of one zone by 10 a.m.” The bidding was sanctioned by Vineyard Power membership earlier this month. A key part of the process involved a community benefits agreement that had been approved by BOEM. Under the agreement, developers who partnered with a community organization such as Vineyard Power qualified for a 10 per cent discount. Mr. Andre said Vineyard Power’s community benefits agreement with Offshore MW, executed formally on Jan. 14, marked a milestone of its own.

“This is the first community benefits agreement in the U.S. for offshore wind,” he said. “It’s a model for Martha’s Vineyard to form this cooperative and now to be awarded a lease.”

He concluded: “It’s been hard work getting to this stage; five years ago it seemed almost herculean. It’s a good day to pause and reflect.”

The article has been updated to correct Vineyard Power's share of the wind farm.