RD572 - Virginia Offshore Wind Development Authority Annual Report – November 1, 2021
The Authority continues to work with and support the efforts by the Virginia Department of Energy (Virginia Energy), the Federal Bureau of Ocean Energy Management (BOEM), Dominion Energy, Avangrid Renewables 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 has brought a number of significant milestones to enhance Virginia’s potential as the location of choice for investment in this burgeoning industry:
• The General Assembly passed and the Governor signed the Virginia Clean Economy Act (VCEA) and offshore wind legislation in 2020. VCEA, the first omnibus renewable energy bill in the South, calls for 100% clean energy generation by 2050 that includes 5.2 GW of offshore wind.
• Legislation also created the Virginia Energy Division of Offshore Wind, the first of its kind in the nation. This Division will serve as a clearinghouse for all offshore wind activities, training, research and economic development. The Commonwealth of Virginia budget also included investments of up to $40 million to upgrade the Portsmouth Marine Terminal to secure new investments in the offshore wind supply chain.
• In the spring of 2020, Dominion Energy and Ørsted installed the first two offshore wind turbines in Federal waters, located 26 nautical miles off the coast of Virginia Beach. These turbines are used to research new technologies aimed at lowering the cost of energy production.
• In October 2020, the Governors of Maryland, Virginia and North Carolina, announced a three-state collaboration to advance offshore wind projects in the region and to promote the Southeast and Mid-Atlantic United States as a hub for offshore wind energy and industry. The creation of the Southeast and Mid-Atlantic Regional Transformative Partnership for Offshore Wind Energy Resources (SMART-POWER) provides a framework for the three states to cooperatively promote, develop, and expand offshore wind energy and the accompanying industry supply chain and workforce.
• Governor Ralph Northam announced in October 2020 the creation of the Mid-Atlantic Wind Training Alliance to build wind energy workforce in Virginia. The Alliance of New College Institute, Centura College and Mid-Atlantic Maritime Academy joined forces to offer Global Wind Organization Training in Virginia for onshore and offshore wind technicians.
• In October 2020, GO Virginia awarded a $529,788 grant to the Hampton Roads Alliance (HRA) to attract a supply chain for the offshore wind industry to the region. HRA will lead a team in the project, including the Port of Virginia, Virginia Energy, Virginia Economic Development Partnership, Old Dominion University, the Virginia Maritime Association and the Hampton Roads Workforce Development Council.
• The Hampton Roads Alliance unveiled the Offshore Wind Supply Chain Development Initiative in July that will develop a comprehensive supply chain to serve the East Coast offshore wind industry. This initiative will position Hampton Roads as the premier destination for offshore wind companies to invest, while also creating new economic prospects for existing businesses, attracting new investments to the region and sparking new permanent job creation.
• In June of 2021, the CVOW Project was among the first in the nation to use a new federal permitting process designed to accelerate offshore wind development. The initiative that was developed in partnership with Old Dominion University and the Virginia Department of Energy will be critical to ensuring new offshore wind leases are approved in a timely manner. The agreement allows the U.S. Army Corps of Engineers to assist the Bureau of Ocean Energy Management (BOEM) with the scientific and technical review of proposed wind projects. This additional capacity will allow BOEM to focus on a broader range of challenges, including the development of additional offshore wind leases. While the agreement covers all renewable energy activities along the Atlantic Coast, the initial focus will be on the review of CVOW and Kitty Hawk offshore wind projects.
• On October 25, 2021, Governor Northam announced an agreement with Siemens Gamesa for a blade finishing facility built on 80 acres in Portsmouth, Virginia at the Portsmouth Marine Terminal, part of the Port of Virginia. It is an investment of almost $200 million dollars and an estimated 310 employees. This will be the first major component facility built in the United States and is the first major step in the creation of the offshore wind supply chain for the United States.
Because of activities and accomplishments in 2020-2021, the Authority makes the following recommendations for 2022 to further advance offshore wind development and related supply chain activities in Virginia. The recommendations are ranked in order of priority.
RECOMMENDATION 1: Continue to support the CVOW Commercial and Kitty Hawk projects through public meetings, comments on BOEM documents and reports, facilitate resolution of potential use conflicts with all stakeholders, and work towards meeting the offshore wind goals of the Clean Economy Act.
RECOMMENDATION 2: Continue to work with all stakeholders to create a local supply chain for CVOW and Kitty Hawk and future offshore wind projects. Collaborate with stakeholders, including Dominion Energy, Ørsted, Avangrid Renewables, Siemens Gamesa, Virginia Economic Development Partnership, universities, the Port of Virginia, 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 wind resources and the supply chain, including leveraging the CVOW project and other uses of the Virginia Energy Research Lease in conformance with existing agreements. Work with Virginia colleges and research universities, and create a platform to promote the benefits of using other areas adjacent to the Research Lease for important wind research, e.g., impacts of hurricanes, marine life and commercial fishing.
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. This will help facilitate approval by the State Corporation Commission (SCC) of the commercial site by defraying its costs to the ratepayers either partly or fully.
RECOMMENDATION 5: To recognize and continue to support the tri-state SMARTPOWER MOU between VA, NC and MD in order to create more jobs in the mid-Atlantic region, bring clean energy to the tristate grid and bring positive benefits to disadvantaged coastal communities.
RECOMMENDATION 6: Promote identification of other potential Wind Energy Areas off the coast of Virginia in consultation with the Department of the Interior and all interested Virginia stakeholders including the Virginia Coastal Zone Management Program which is in the process of developing a Virginia Ocean Plan to identify areas for offshore wind and engage stakeholders in order to minimize use conflicts.
As required by § 45.2-1808 of the Code of Virginia, the Authority submits this tenth 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.