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Is Offshore Wind in Virginia's Future?

Virginia could get at least ten percent of its electricity from offshore wind farms off our coast by the end of this decade. But will it actually happen?

The past couple of years have been tough ones for the offshore wind industry, which is still struggling to launch. The recession has made states reluctant to invest, even when the payoff looks huge. Cheap natural gas is hurting the market for renewable energy just as wind and solar have started hitting their stride. Congressional dysfunction has prevented the renewal of critical tax credits that the wind industry still needs to compete. 

A few other states are making fitful progress towards building offshore wind farms, but they have conditions Virginia doesn’t: higher energy prices that make offshore wind more competitive with fossil fuels, renewable energy standards that push utilities to become buyers for the electricity, and congested transmission grids that favor local generation.

But of course, Virginia has its own advantages, including possibly the best wind resources in the mid-Atlantic, skilled workers, and extremely competitive port facilities. And the enthusiasm of our legislators and public for the idea of offshore wind matches that of any state. 

At the same time, though, our governor and our major utility give decidedly mixed signals, extolling our offshore wind potential at one moment, and in the next opining that no one would actually want to pay for it. And yet Dominion Power hopes to buy up all the Virginia-area offshore wind leases that are offered for bid this fall. So what gives with Dominion and offshore wind?

One answer comes from Guy Chapman, Dominion’s Director of Renewable Energy Research and Program Development, who spoke at a wind conference held at James Madison University this past June. He said that right now with natural gas so cheap, the company doesn’t expect to build any wind at all, on land or at sea. But if conditions improve, the company wants to be in a position to change its mind, and that means buying up the offshore leases and doing site surveys, technical and environmental studies, and other planning that will add up to $40 or 50 million. Dominion would rather lose the money than be locked out of a potential new growth area.

What this means for the rest of us is that when we read somewhere that Dominion has “plans” for offshore wind, or that it has two wind farms in Virginia’s mountains “under development,” we should realize it defines those terms to mean, “Don’t hold your breath, honey.” 

This presents something of a puzzle for decision-makers at the federal Department of Interior. If they let Dominion buy up the leases for the whole Virginia wind energy area, knowing the company isn’t actually planning to build a wind farm, then they aren’t advancing the cause of offshore wind any. By contrast, the other bidders include companies like Apex Wind and Fishermen’s Energy that make their money by building wind farms, so they are highly motivated to follow through. 

Selling the lease to Dominion might mean no one builds a wind farm off Virginia. That would be okay with Dominion—for a monopoly, keeping out competition is an end in itself—but it wouldn’t serve the public interest.

On the other hand, if something happened to make Dominion actually want to build, the fact that it’s a regulated utility means they could probably do it more cheaply than Apex or Fishermen’s. That would benefit ratepayers and make the energy more competitive with other fuels, like natural gas.  

What might make Dominion want to build? Some combination of the following factors would likely play a part: 

The cost of offshore wind might come down relative to fossil fuels. With no offshore wind farms operating in the U.S. yet, cost projections are still speculative. The first projects here will be expensive, as all “firsts” are, but industry members are confident that prices will come down dramatically as the industry matures. Dominion and other companies and researchers, using federal grants, are currently studying opportunities to slash costs. 

Virginia might grow bolder. It’s conceivable, though not really likely, that Virginia will take a decisive step towards offshore wind by enacting an effective renewable energy standard or offshore wind mandate, to replace the sham that is our current renewable energy law. This wouldn’t happen under Bob McDonnell’s leadership; in spite of his “all of the above” rhetoric, he is adamantly opposed to real change in state policies that favor coal. Chances would improve in 2014 under Terry McAuliffe or possibly Bill Bolling (but not Ken Cuccinnelli). 

Congress might finally take action to deal with climate change. Sure, and pigs might fly. But drought and heat waves are changing minds across the country about the reality of global warming. Even skeptics may decide to hedge their bets. And even if not, the economic and national security case for renewable energy has already swayed some conservatives, and may bring more on board as other countries outpace us. A carbon tax, a national renewable electricity standard, or some other incentive would do for offshore wind in Virginia what Virginia isn’t likely to do itself.

This post is contributed by a community member. The views expressed in this blog are those of the author and do not necessarily reflect those of Patch Media Corporation. Everyone is welcome to submit a post to Patch. If you'd like to post a blog, go here to get started.

Rob Jackson September 10, 2012 at 09:11 PM
I'm not troubled by Dominion buying access to offshore wind, but the idea it might simply warehouse the access - not using it, but keeping it from other potential users - is troubling. There needs to be build-out requirements to go with the auctioned locations.
Dave Webster September 11, 2012 at 09:46 AM
How serious is the problem of birds being killed by wind farms? In other words, what is the total number of birds killed each year in the United States by wind farms? Is there anything that can be done about this?
Ivy Main September 11, 2012 at 12:29 PM
Dave, the bird kills have gotten a lot of publicity, and no one is happy about it when it happens, but wind turbines are way down on the list of human-caused threats to birds. Over 58% of bird kills attributed to humans are from buildings (windows), while wind turbines are less than one-tenth of one percent. (Besides windows, the other big killers are transmission lines, cats, automobiles and pesticides.) Offshore wind has the additional advantage that there are fewer birds ranging out past 12 miles from the coast, and even then, some neat European studies with radar show birds tend to avoid wind farms.
Clive Roux October 10, 2012 at 11:48 AM
Offshore wind is the wrong approach. It changes nothing in the system that you are complaining about of government apathy in your article. What you should rather consider is the case for home roof mounted solar. Why? The main reason being as the stock of home based solar mounts up as in California or Germany (more than 4 times more solar installed than the US in absolute terms!) the competition for big providers like Dominion mount. Now that's what we need, alternatives and checks and balances so that the view of the consumer will get considered. Right now a roof mounted solar system does not look cheap. The reality is that you would have to finance a project of about $25,000. A reasonable car. That's all. What do you get in return? A return on your investment of at least 60% over 25 years and or an increase of your homes price by about $14,000. Your electricity cost will freeze at the price you pay now and in 17 years after the system is paid back you will get electricity for free for 7-15 years. Not bad at all. A better investment than the stock market for sure. For more on the facts visit http://www.livegreen.cc/2012/10/08/home-owners-you-have-a-huge-part-to-play-in-protecting-the-environment/

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