By Dave Ress
July 10, 2017
Dominion Energy is reviving plans for an offshore wind energy project 27 miles east of Virginia Beach in a move it hopes will set the stage to make the Hampton Roads region a national leader in a still-developing technology.
The company hopes to have two wind turbines — “taller than the Washington Monument” as CEO chief executive Tom Farrell put it — online by the end of 2020.
With them, the energy giant will be testing the water for a huge offshore wind farm, Farrell said as he announced the project’s return to life. That wind farm, if built, would be capable of generating more electricity when the wind blows than does Dominion’s workhorse Surry nuclear power plant — enough to power roughly 2 million homes.
“We’ve been working on this for a long time,” Farrell said. “It took a lot of years and a lot of work to get here.”
Dominion put the project on ice last year, after losing the $40 million the U.S. Department of Energy had pledged to support the project when the company couldn’t guarantee that it and its partners, which included Newport News Shipbuilding, could have the turbines up and running by 2020. By that point, after a second round of bidding, the company thought it had the price of the project down to a level more affordable than the original sticker-shock bids of roughly $400 million. Dominion had originally hoped to do the project for $230 million.
Dominion Energy Virginia announced an agreement and strategic partnership Monday, July 10, 2017 with DONG Energy of Denmark to build two, 6-megawatt wind turbines off the coast of Virginia Beach.
Since then, Dominion has signed up a new partner, Denmark’s DONG Energy, which installed its 1,000th offshore turbine last year and is hoping to crack the U.S. market. DONG signed a roughly $300 million, fixed-price contract for the work, a big relief for Dominion since the bids it had received previously did not cap costs.
While DONG is developing projects off the Massachusetts and New Jersey costs, the company thinks its venture with Dominion “could be the first to get steel in the water,” said Francis Slingsby, DONG’s head of strategic partnerships for North America.
With the two turbines, Dominion hopes to see whether the equipment can withstand the rough waters and storms of the Atlantic, particularly the hurricanes that haven’t been an issue in other offshore projects, said Mark D. Mitchell, vice president for generation construction.
The company wants to be sure the turbines won’t affect marine life and to be sure that they can be built without interfering with whale migrations, he said.
If the turbines pass these tests, Mitchell said he’s hoping the larger wind farm project — which would produce 2,000 megawatts of electricity — could begin to come online in mid in the mid-2020s.
The cost of each turbine would have to come down, something Dominion hopes will happen as more U.S. firms jump into the business of supplying parts and services for offshore wind projects. It is too soon to say what kind of impact offshore wind development could have on rates, he added.
The two turbines will stand in about 80 feet of water — one key advantage Virginia has is fairly shallow waters well past the horizon — and will rise 600 feet above the sea, with three blades, each roughly 250 feet long. That means one common objection to offshore turbines, that they are unsightly, shouldn’t be an issue since they’ll be out of sight from land, Dominion officials say.
“This is the future ... Virginia will be the leader in offshore wind,” said Gov. Terry McAuliffe, who came to Portsmouth to announce the project.
“This is a really big deal for us” McAuliffe added. “These are jobs, good-paying jobs.”
Like Dominion, McAuliffe is looking for the project to give a boost to Virginia’s renewable energy industry, while dropping a heavy hint Monday about which port he wants DONG to ship turbine components through.
Noting that the project was the first U.S. offshore wind project involving a utility company, McAuliffe said it should encourage other utilities in coastal states to develop their own projects.
It also means a more secure market for wind power than independent producers may see, said the Deputy Secretary for Commerce and Trade Hayes Framme, McAuliffe’s point man on renewable energy.
The two turbines will be on the offshore tract the U.S. Bureau of Ocean Energy Management auctioned in 2013, which Dominion obtained with a $1.6 million bid. They’ll be connected to the shore with an underground cable — the same kind of 34,500-kilovolt wire utilities often run underground beneath neighborhood streets, carrying just 7 percent of the load Dominion hopes to transmit on its controversial James River transmission line between Surry and James City counties.
The announcement received a lukewarm reaction from environmental groups.
“This should have happened years ago,” said Mike Tidwell, executive director of the Chesapeake Climate Action Network. “Dominion already lost a federal grant for $40 million for dragging its feet on the project. ... Meanwhile, Dominion continues to push for dangerous climate-warming fossil fuel projects like the Atlantic Coast Pipeline, along with the support of Governor Terry McAuliffe.”
Eileen Levandoski, assistant director of the Sierra Club Virginia Chapter, said she was encouraged to hear the news, but added, “Dominion dragged their feet on offshore wind in the time between the loss of the DOE grant in May 2016 and today’s announcement. ... While the commitment to 12 megawatts by 2020 is helpful, the crisis we face with climate change demands that Dominion also engage aggressively on the commercial lease area and immediately commit to 400 (megawatts) by 2022 and 2,000 by 2030.”