“De-Risking” Virginia Offshore Wind
In its original incarnation a few years back, the two-turbine wind project Dominion Energy proposed to build off the Virginia Beach coast was billed as a “research” project. In the hope of winning a $40 million federal research grant, Dominion wanted to see how well the two wind turbines held up in hurricane conditions of the mid-Atlantic before committing to a large-scale wind farm.
That grant never materialized, but the project lives on. According to the latest project time-line, if all goes according to schedule, the two turbines will be complete by August 2020. Now Dominion and its contractor, Ørsted Energy, are calling the $300 million investment in Virginia’s renewable energy future a “demonstration” project.
The Coastal Virginia Offshore Wind (CVOW) project will have no new technology and little new engineering. The turbines will collect data that might be useful when planning the final configuration of far bigger wind farm proposed by Dominion. But there is no assurance that the turbines will encounter hurricane conditions before Dominion builds the wind farm. Subject to regulatory approvals, the utility says it ” plans to invest up to $1.1 billion in offshore wind” by 2023.
What, then, is the purpose of the two turbines, which will produce the most expensive electricity on a cost-per-kilowatt basis in the entire Dominion system? I posed that question to Dominion a month ago and got this response, which contained the answer but, for lack of context, I did not appreciate. Accordingly, when invited to chat with Hayes Framme, an aide to former Governor Terry McAuliffe who now handles government relations and communications for Ørsted, I jumped at the opportunity to ask the question anew.
It turns out that the two demonstration turbines have served much of their purpose of “de-risking” the larger project already. They provided the impetus for developing the regulatory framework governing wind turbines in federal waters, Framme explained. “The turbines have been certified in Europe for a decade,” he said. “But that doesn’t translate directly into U.S. regulations.”
The first wind project to be built off the U.S. east coast was the Block Island wind farm; located in the state waters of Rhode Island, it was subject to state regulations. Dominion leased 112,800 acres from the Bureau of Ocean Energy Management (BOEM) in federal waters 27 miles off the Virginia coast. CVOW is the first offshore wind project to apply for a federal permit. Before approving a project, BOEM first had to write the governing regulations.
Many stakeholders were consulted, from the U.S. Navy to commercial shippers to the fisheries industry. Rules had to be written governing safety and environmental conditions during construction. Certain activities are prohibited during the migration of right whales through the area, for example. When hammering the massive pylons 60 feet into the seabed, contractors will have to create “bubble curtains” to blunt sound waves that might be disruptive to marine life.
By writing the rules for erecting and operating wind turbines, BOEM has significantly reduced regulatory uncertainty for the bigger second phase, Framme said.
The demonstration project also will help Dominion collect data to validate and refine its weather modeling, said Framme. “Bad weather costs money,” not just when the turbines are operational but during the construction phase. Dominion’s contractor for the bigger project — Framme hopes it will be Ørsted but that hasn’t been determined yet — will have to order and/or lease specialized vessels to transport and erect the massive pylons and blades. There is a two-year lead time for securing expensive jack-up vessels, which sprout legs that extend to the ocean floor and serve as the assembly platform. The contractor will need to lease the vessel for long enough to install dozens of turbines, while allowing for bad weather. The more it knows about weather conditions, the more accurately the contractor can control the weather risk.
The European wind-power industry has built turbines capable of withstanding brutal North Sea storms, but Framme said that Mid-Atlantic hurricane conditions will be different. In North Sea storms, wind and waves assault the turbine monopoles and towers from different directions. In a hurricane, wind moves in a vast circle in a consistent direction. Ideally, Ørsted would like to see if the different wind patterns stress the turbines differently.
While there is no guarantee the demonstration turbines will encounter hurricane conditions in time to influence the design of the bigger second phase, Framme said the data collected will help tweak the design to bolster electricity generation by a few extra percent, which can provide a big payoff over the life of the project.
The State Corporation Commission has suggested that the value of the demonstration project will come only when the turbines start spinning and generating electricity, said Framme. But the front end of the project — getting the regulatory framework — has value, too. “Virginia should not sit on its hands and watch [the turbine blades] spin before deciding whether to go bigger.”