By Tamara Dietrich
Gov. Ralph Northam is pushing a plan for Virginia — and Hampton Roads — to become a supply chain and service hub for offshore wind energy development in the Atlantic.
The plan is part of a “roadmap” that the governor’s office recently released on ways to attract investors, developers and manufacturers as the offshore wind industry gathers steam in the U.S.
The report outlines potential economic benefits to the state, including 14,000 new jobs that experts say will be needed to build and maintain specialized infrastructure.
Not only can Virginia lead in driving U.S. offshore wind development, Northam said in a statement, but “growing the supply chain sector at this early stage will prepare Virginia to competitively deliver the development of our own offshore wind resources in the coming years.”
The supply chain includes development, construction, operation and maintenance, while infrastructure components include turbine blades, generators, nacelles or housings, towers, foundations, cables and construction staging.
After lagging behind European nations for decades in developing offshore wind, the concept is finally catching on in the U.S., and accelerating rapidly.
At least 10 gigawatts (GW) of offshore wind capacity is expected to be installed in this country by 2030, including 2 GW in Virginia, straining the existing supply chain, the report states.
Meanwhile, North Carolina is moving to produce 2 GW off its coast, and the Northeast has power purchase agreements in place for about 2 GW, with 3 GW more expected this year.
The effort to “align businesses interested in offshore wind with an industry at the early stages of development is the most important step in enabling the East Coast offshore wind build-out,” said John Warren, director of the Department of Mines, Minerals and Energy.
The DMME contracted with BVG Associates LLC last summer to study what the state brings to the table. In doing so, BVGA consulted with government, economic and workforce development officials in Hampton Roads.
Their report, “The Virginia Advantage: The Roadmap for the Offshore Wind Supply Chain in Virginia,” recommends creating an Office for Offshore Wind, pursuing anchor tenants and developing and expanding a suitable skilled workforce.
BVGA advisory director Andy Geissbuehler also recommends regional collaboration to develop a supply and service network, and the report suggests working with partners in the mid- and south-Atlantic in order to keep costs down and leverage the best of what each state has to offer.
The DMME already has initiated talks with Maryland, North Carolina and South Carolina.
Virginia’s particular advantages include ports that already have a high level of readiness, such as the Newport News Marine Terminal, Portsmouth Marine Terminal, Peck Marine Terminal in Chesapeake, Virginia Renaissance Center in Norfolk and BASF Portsmouth.
Hampton Roads also provides deep channels and no overhead restrictions for ships, a skilled workforce and a business-friendly environment.
In Virginia, Dominion Energy is partnering with global developer and energy company Orsted on a $300 million two-turbine offshore pilot project in federal waters 24 nautical miles off Virginia Beach. Those turbines should be operational by December 2020.
If that project proves out, Dominion could build a larger commercial project by 2024 at a cost of about $1.77 billion.
Orsted is based in Denmark but is establishing offices now in the U.S., including in Richmond. On Thursday, spokesman Hayes Framme called the state’s new roadmap a “very positive document.”
“It sends a signal to the industry that Virginia is serious about driving the supply chain to the commonwealth,” Framme said.
The multi-state collaboration approach to drive the market is something no other other region of the country has tried, he said.
Orsted is partnering only on Dominion’s pilot project, but hopes to continue to play a role as Virginia pursues greater opportunities in offshore wind, he said.
“Making sure folks understand what the value of offshore wind is,” said Framme. “Not only from an economic development standpoint, because that’s tremendous, but also from a fuel-diversification standpoint, from a carbon emission-reduction standpoint. Those things matter as well, as Hampton Roads is the second most vulnerable to sea level rise in the country.”