EQNR - European firms dominate first auctions for California offshore wind rights

European energy companies led the bidding Wednesday in the U.S. government's first-ever auction of offshore wind development rights off the California coast, drawing $757M in winning bids .

The U.S. Interior Department's Bureau of Ocean Energy Management auctioned five lease areas equal to a combined 373K acres off California's north and central coasts; previous federal offshore wind auctions were for leases in shallower waters of the Atlantic Ocean.

The winning bidders mostly were divisions of European energy companies already developing projects in the U.S. offshore wind market, included Equinor ( NYSE: EQNR ); RWE ( OTCPK:RWEOY ); Copenhagen Infrastructure Partners; and Ocean Winds, a joint venture between Engie ( OTCPK:ENGIY ) and EDP Renewables.

The provisional winners bid an average of $2,028/acre, well below the nearly $9K/acre some of the same companies paid earlier this year for leases off the coasts of New York and New Jersey.

Even as California clamors for clean energy, the Pacific projects face significant technological and regulatory challenges; the slowing global economy and higher interest rates tied to rising inflation also may have dampened demand.

ETF: ( FAN )

Equinor ( EQNR ) is throwing off strong free cash flow, and its shares are "robustly undervalued," Michael Fitzsimmons writes in an analysis posted recently on Seeking Alpha .

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