RD465 - Virginia Offshore Wind Development Authority Annual Report – October 18, 2019
In 2019, the decade-long steady march of Virginia and other East Coast states engaged in developing offshore wind reached a gateway. Governor Ralph Northam issued Executive Order 43 in September, calling for 30 percent of electric energy in Virginia to come from renewable sources by 2030, to make Virginia’s electricity generation carbon free by 2050, and to start by developing offshore wind in a big way. Dominion Energy accepted the challenge two days later, announcing its plans to develop 2,600 megawatts of offshore wind and have it operational by 2026.
Also in 2019, after years of planning, on-shore construction of the Coastal Virginia Offshore Wind (CVOW) project began in the summer, to be followed by turbine installation in the spring of 2020. The CVOW project is sure to provide valuable research data as Virginia moves forward with the development of the larger commercial offshore wind energy lease area.
Dominion Energy plans to build what would be the largest offshore wind development in the country, about 220 turbines able to power 650,000 homes at peak wind. And there are sure to be more such developments to come. Many of the 15 active federal leases on our coast are very close to the point of large scale turbine construction and installation, and while currently there are no turbines installed in these federal lease areas, it has become clear in the past year that coastal states, the industry and large energy users who wish to wean themselves off of fossil fuels would like to have even more space for wind energy development on the Outer Continental Shelf.
The Authority continues to work with and support the efforts by the Virginia Department of Mines, Minerals and Energy (DMME), the federal Bureau of Ocean Energy Management (BOEM), Dominion Energy, Ørsted and other stakeholders to help accelerate offshore wind development projects in Virginia, address environmental and financial issues, and create port and supply chain economic opportunities.
The past year brought a number of significant milestones to enhance Virginia’s potential as the location of choice for investment in this burgeoning industry:
• In January, the DMME joined the National Offshore Wind Research and Development Consortium.
• On May 31, DMME and Old Dominion University (ODU) signed a Memorandum of Understanding (MOU) for the state’s offshore wind projects. The agreement is based on providing research and support for Virginia’s offshore wind, with focus on the Coastal Virginia project.
• In June, the Bureau of Ocean Energy Management (BOEM) approved the Research Activities Plan needed for the installation of CVOW that streamline the federal agency's approval process for additional research activities in the DMME research lease.
• On July 1, land construction for CVOW broke ground. Dominion also announced plans to seek approval to invest an additional $800 million by 2023 to ready the first phase of commercial development by 2024.
• On July 18, BOEM convened a Joint Virginia and North Carolina Renewable Energy Intergovernmental Task Force Webinar and announced its plans to implement the socalled “Path Forward" program to expand federal lease opportunities, Wind Energy Areas, for offshore wind development on a regional basis. VOWDA and the State of North Carolina expressed interest in identifying additional WEAs for potential future offshore wind leasing. According to BOEM’s analysis, both states have potential for offshore wind energy development and BOEM will work with the Intergovernmental Task Forces in this region to further evaluate leasing opportunities.
• ODU, in late 2018, convened a 120-member offshore wind task force consisting of offshore wind energy leaders and experts from all levels of government, as well as the public and the private sector. The task force’s first step was establishing an 11-member executive committee (EXCOM) that keeps efforts aligned and moving forward.
• On August 23, Old Dominion University convened a roundtable of leaders from across Hampton Roads and Virginia to update U.S. Senator Mark Warner and Governor Ralph Northam's chief of staff, Clark Mercer, on the region's offshore wind plans, projects and research proposals.
• On September 16, Governor Northam signed Executive Order 43 which sets targets for emission reductions and clean energy expansion. The order calls for 30 percent of Virginia’s electricity generation to come from renewable energy sources by 2030, a fivefold increase, and 100 percent from carbon-free sources by 2050. The order calls to develop the offshore wind energy area with as much as 2,500 MW by 2026.
• Days after the Governor’s announcement, on September 19, Dominion Energy announced plans to develop the largest offshore wind project in the United States, 2,600 MW to be in operation off the coast of Virginia Beach by 2026. Once completed, about 220 wind turbines would be able to power 650,000 homes at peak wind conditions.
• In early October, DMME and ODU signed a three-year agreement for the university, its Research Foundation and Center for Coastal Physical Oceanography to support the integration of Virginia’s renewable energy research leases into a National Ocean Test Bed and to accelerate Virginia’s participation in the U.S. East Coast offshore wind supply chain, including workforce development through higher education and training.
• DMME, VEPD, Port of Virginia, Governor's Office, Dominion, Ørsted and others continued during 2019, as in 2018, to meet with wind developers and supply chain companies that are evaluating Virginia port infrastructure, workforce and maritime industry for operations and investment. The Commonwealth continued and intensified efforts to market Virginia's unique port and workforce assets to supply chain companies and developers using consistent messaging materials and coordinated resources drawn from multiple agencies, maritime industry leadership, ODU, Dominion and Ørsted. As a result of activities and accomplishments in 2019, the Authority makes the following recommendations in 2020 and beyond to further advance offshore wind development and related supply chain activities in Virginia. The recommendations are ranked in order of priority.
RECOMMENDATION 1: Accelerate the drive for resources and policies to ensure that the first phase of the commercial wind energy buildout will support initial generation of energy by 2024 and that additional phases will come online in 2025 and 2026, to fully develop up to 2,600MW of wind energy off Virginia’s shore in six years.
RECOMMENDATION 2: Develop a coordinated policy, economic development and workforce development strategy to incentivize and thereby ensure offshore wind supply chain opportunities for Virginia. Collaborate with stakeholders, including Dominion Energy, Ørsted, Avangrid Renewables, Virginia Economic Development Partnership, universities, the Port of Virginia and the maritime industry, Virginia and European manufacturers, and others to promote Virginia companies as part of the supply chain for offshore wind.
RECOMMENDATION 3: Actively solicit research and development opportunities and activities to reduce the cost and risk of developing the wind resource and supply chain, including leveraging the CVOW project and other uses of the DMME Research Lease in conformance with existing agreements.
RECOMMENDATION 4: Work to identify possible power off takers in the Commonwealth and elsewhere, such as large data companies with clean energy commitments and Amazon’s Eastern Headquarters2 scheduled to be constructed in Northern Virginia at National Landing, for offshore wind energy from CVOW and the commercial Wind Energy Area. This will help obviate the need for SCC approval of the commercial site by defraying its costs to the ratepayers either partly or fully.
RECOMMENDATION 5: Work towards a multi-state regional supply chain cluster in Mid- and South Atlantic coastal states, offering the industry a larger pipeline of projects and a wide network of the best of what each state has to offer.
As required by § 67-1209 of the Code of Virginia, the Authority submits this eighth annual report to the Governor and the Chairpersons of the House Appropriations Committee, the Senate Finance Committee and the House and Senate Commerce and Labor Committees.