Dominion Virginia Power, a subsidiary of Dominion, on September 4 bid $1.6 million to win the lease for 112,800 acres of federal land approximately 23.5 nautical miles off the coast of Virginia to develop an offshore wind turbine farm capable of generating up to 2,000 megawatts of electricity, enough for 700,000 homes.
“Offshore wind has the potential to provide the largest, scalable renewable resource for Virginia if it can be achieved at reasonable cost to customers,” said Mary C. Doswell, senior vice president-Alternative Energy Solutions with Dominion Virginia Power. “We will now proceed with the BOEM timetable for development of the commercial wind energy area while advancing our research proposal and looking for ways to lower the cost of bringing offshore wind generation to customers.”
BOEM has several milestones that Dominion must meet to keep the lease. The lease will have a preliminary term of six months during which Dominion must submit a Site Assessment Plan to BOEM for approval. A Site Assessment Plan describes the activities (e.g., installation of meteorological towers and buoys) the lessee plans to perform for the assessment of the wind resources and ocean conditions of its commercial lease. After a Site Assessment Plan is approved, Dominion will have up to four and a half years in which to submit a Construction and Operations Plan (COP) for approval, which provides a detailed outline for the construction and operation of a wind energy project on the lease. If the COP is approved, the lessee will have an operations term of 33 years.
Dominion expects the first turbine to be installed in about 10 years pending project approval by state regulators.
The sale follows a July 31 auction of 164,750 acres offshore Rhode Island and Massachusetts for wind energy development that was provisionally won by Deepwater Wind New England, LLC, generating $3.8 million in high bids.
“This year’s second offshore wind lease sale is another major milestone in the President’s all-of-the-above energy strategy and demonstrates continued momentum behind a robust renewable energy portfolio that will help to keep our nation competitive and expand domestic energy production while cutting carbon pollution,” said Secretary of the Interior Sally Jewell. “Today’s sale is the result of a great deal of collaboration and planning with the Commonwealth of Virginia, which has been a leader in advancing offshore renewable energy for the Atlantic coast and an enthusiastic partner in this effort.”
“Today’s renewable energy lease sale offshore Virginia is another significant step forward in the President’s call for action to address climate change and the Administration’s all-of-the-above energy strategy,” said Bureau of Ocean Energy Management (BOEM) Director Tommy Beaudreau. “I congratulate (Dominion Virginia Power) and we look forward to overseeing their development of the Virginia wind energy area, which will create jobs, increase our energy security and provide abundant sources of clean renewable power.”
Eight companies, including Dominion, were approved to bid, but only two firms participated. The auction lasted six rounds.
Others that BOEM had approved to bid were Apex Virginia Offshore Wind LLC of Charlottesville, Va; Energy Management Inc. of Boston; EDF Renewable Development Inc. of San Diego; Fishermen’s Energy LLC of Cape May, N.J.; Iberdrola Renewables Inc. of Portland, Ore.; Sea Breeze Energy LLC of Philadelphia; and Orisol Energy U.S. Inc. of Ann Arbor, Mich.
Dominion is involved in other offshore wind research projects. Dominion and its team was one of seven projects selected to receive $4 million each in federal matching funds to undertake initial engineering, design, and permitting for a demonstration facility of two six-megawatt turbines with a goal of finding innovative ways to lower costs of offshore wind. The Department of Energy will select up to three of the projects for follow-on phases to move forward with the final design, permitting, and ultimate construction of these demonstration projects. The projects must be in operation by the end of 2017.
BOEM is expected to announce additional auctions for Wind Energy Areas offshore Maryland, New Jersey, and Massachusetts later this year and in 2014.