Under the new agreement, the administration is targeting potential wind leasing that could power 1.6 million homes, including in a 399-square-mile (1033-square-kilometer) area northwest of Morro Bay, capable of supporting 3 gigawatts of offshore wind capacity.

The Interior Department also is advancing plans for potential wind leases in waters off Humboldt County, with the capacity to generate 1.6 gigawatts of power. Under the deal, the Defense and Interior Departments are promising to collaborate so the region can support military exercises and renewable energy development.

White House National Climate Advisor Gina McCarthy said the breakthrough “will set the stage for the long-term development of clean energy and the growth of a brand new made-in-America industry” that takes advantage of a “world-class offshore wind resource” near California.

The pact sets the stage for a potential government sale of wind leases near the northern and central California coast as soon as mid-2022, following additional environmental analysis and public consultation.

The area is a top target for renewable energy development. Waters off the U.S. West Coast beckon developers with steady, strong evening winds that could generate nearly a terawatt of electricity and help satisfy a California goal to rely on only carbon-free energy by 2045. Offshore wind development in U.S. Pacific waters also could help meet President Joe Biden’s goal of getting 30 gigawatts of offshore wind power capacity installed by the end of the decade.

Yet, technological and political challenges have slowed wind development in the region. The continental shelf plunges fast and deep off the U.S. West Coast, making it impossible to install conventional turbines into the sea floor and compelling the use of more expensive floating structures instead.

Offshore wind projects in the targeted area about 17 to 40-miles off northern San Luis Obispo County could link up with existing electric infrastructure, funneling power from the turbines to a decommissioned power plant at Morro Bay.

Military officials have long objected to renewable development in some of the most promising West Coast waters, which are also used for testing and training operations. Tuesday’s breakthrough comes after nearly two years of negotiations by a working group representing key federal agencies, the Defense Department and the California Energy Commission. The effort to broker a compromise was spurred on by California Democratic Representatives Salud Carbajal and Jimmy Panetta.

“The Defense Department is committed to working across the U.S. government to find solutions that support renewable energy in a manner compatible with essential military operations,” Under Secretary of Defense for Policy Colin Kahl said in a news release Tuesday.

The federal government has already sold wind leases along the shallower East Coast, but no commercial leases have been offered in U.S. Pacific waters.

Several renewable developers have signaled interest in the region. Magellan Wind, Orsted North America Inc. and Equinor ASA are part of a coalition pushing for offshore wind development near California. Castle Wind LLC, a partnership of Trident Winds Inc. and EnBW North America, has proposed a 1,000-megawatt floating offshore wind farm near Morro Bay.

California Governor Gavin Newsom said the effort was critical to meeting the state’s clean energy goals. The announcement “represents the innovative approach we need for a clean energy economy that protects the coasts, fisheries, marine life, and tribal and cultural resources we value so much as Californians,” Newsom said in the release.