RD311 - Virginia Offshore Wind Development Authority Annual Report - October 15, 2014


Executive Summary:
The Virginia Offshore Wind Development Authority (“VOWDA” or “the Authority”) was created in 2010 by the Virginia General Assembly. The Authority oversees data gathering, research and planning to support offshore wind development off Virginia’s coast, tracks issues as they arise, and makes recommendations for promoting Virginia offshore wind development and associated economic development opportunities for supply chain businesses and Virginia’s ports. This report constitutes the third annual report of the Authority’s activities and accomplishments.

This year has been a major year for offshore wind in the Commonwealth of Virginia. Dominion Virginia Power was the successful bidder for the commercial Wind Energy Area (WEA) in federal waters off Virginia’s coast. This represented the nation’s second competitive lease sale. Once developed, the lease will be capable of accommodating up to 2,000 megawatts (MW) of electricity, enough renewable energy to power up to 500,000 homes and businesses. The Virginia Offshore Wind Technology Advancement Project (VOWTAP) team was also selected by the Department of Energy (DOE) for an additional $47 million to continue the development of the offshore wind demonstration project. The VOWTAP is expected to produce enough renewable energy to help power 3,000 homes and businesses in Virginia. Furthermore, the Department of Mines, Minerals, and Energy (DMME) completed the collection of geophysical data in Virginia’s WEA. Finally, two research leases were offered to DMME for the purpose of demonstrating advanced technologies and innovation to reduce the cost of offshore wind. VOWDA was a major supporter of each of these activities and played a key role in facilitating data collection and providing offshore wind policy support.

In 2014, the Authority continued work on its four main goals established by the 2010 legislation, which are summarized as follows:

1. Virginia Offshore Industry Data: Facilitate the definition, collection, and dissemination of relevant metocean data, environmental data, and other information needed by Virginia offshore wind stakeholders, using existing, planned, or projected sources of data collection or activities.

2. Offshore Leasing, Permitting, Financing, and Regulation: Identify existing federal and state barriers to the development of the offshore wind industry in Virginia.

3. Virginia Offshore Job Creation and Supply Chain Development: Work in cooperation with relevant local, state, and federal agencies to accommodate the manufacturing, assembly, and maintenance of offshore wind energy project components and vessels.

4. Offshore Wind Project Siting and Development: Communicate and coordinate with stakeholders, including the Department of the Interior Bureau of Ocean Energy Management, Regulation, and Enforcement (DOI BOEMRE, subsequently renamed BOEM) Task Force to ensure the development of offshore wind projects is compatible with other ocean uses and avian and marine resources, including both the possible interference with and positive effects on naval facilities and operations, NASA-Wallops Flight Facility operations, shipping lanes, recreational and commercial fisheries, and avian and marine species and habitats.

To accomplish its goals, the Authority worked with and supported efforts by the DMME, BOEM, and other stakeholders to help accelerate offshore wind development projects in Virginia. The Authority heard presentations throughout the year from various stakeholders and experts and analyzed this and other information to determine the appropriate next steps to facilitate development of the offshore wind energy resource, to provide reasonably priced renewable energy, and to develop an offshore wind industry and supply chain that will create economic opportunity for businesses and good jobs for Virginians. As a result of its activities and accomplishments in 2014, the Authority makes the following recommendations to advance offshore wind development and related supply chain activities in Virginia. The recommendations are ranked in order of priority.

RECOMMENDATION 1: Leverage state funding with additional private and federal funding to give Virginia a competitive advantage over other Mid-Atlantic States in attracting the offshore wind industry.

• Establish Virginia as the ideal manufacturing, operational and supply chain hub for offshore wind development in the Mid-Atlantic region.

• Assess opportunities for local manufacturing, operations and maintenance, and other services to support industry; identify and address any gaps; and publicize the asset strengths and other unique advantages that differentiate the Commonwealth as the best location for a Mid-Atlantic offshore wind hub. The Authority should lead and accomplish this strategy by June 30, 2015.

• Gather data to demonstrate the economic benefits that would result if the Commonwealth of Virginia became home to a vibrant Mid-Atlantic offshore wind industry and supply chain, and work with Dominion Virginia Power, as the commercial lease holder, and others to strategically engage potential supply chain and workforce development opportunities.

RECOMMENDATION 2: Support successful completion of the advanced technology demonstration project by working with state and federal agencies to ensure advancement of the project.

• Work with interested stakeholders to address any concerns they may have in the Environmental Assessment (EA) related to the demonstration.

• Work with the VOWTAP team to remove any impediments to the project’s permitting and offer environmental and regulatory support.

RECOMMENDATION 3: Support and expedite the federal process for development of the commercial wind energy area off of the coast of Virginia and ensure compatibility with other ocean uses and avian and marine species and habitat.

• Support the extension of federal Investment Tax Credits and Production Tax Credits in a form that would assist offshore wind development in Virginia.

• Work with the federal lessee and the applicable federal resource agencies to expedite permitting of offshore wind commercial development.

• Work with interested stakeholders to address any concerns they may have in the EA or Environmental Impact Statement (EIS) related to the commercial lease.

RECOMMENDATION 4: Support and expedite the state process for developing the commercial wind energy area off the coast of Virginia by removing barriers to commercial development of VOWTAP and the federal lease area.

• Further engage with the VSRA, VOW Coalition, maritime industry, and other stakeholders to ensure successful and productive shared use of the ocean and port facilities.

• Quantify public perceptions of, and the level of support that Virginia citizens are willing to provide for, offshore wind and other renewable generation sources.

• Support legislative and administrative efforts to encourage the development and approval of offshore wind projects in Virginia, in addition to attracting offshore wind economic development to the Commonwealth.