Stimulus funds boost biomass but overlook Virginia’s wind powerMarch 29, 2010 6:00 AM
by Garry Kranz
The Virginia Correctional Center for Women in Goochland County seems an unlikely place for experiments with renewable fuel. The same is true for the Wise Correctional Unit in Coeburn. Yet both prisons have received grants to install green-energy systems under the American Recovery and Reinvestment Act, otherwise known as the stimulus bill.
The Goochland facility, the oldest women’s prison in Virginia, is getting $942,000 of stimulus funding to convert two huge boilers: one to be fueled by burning a mixture of coal and wood pellets, and a second boiler that will burn biodiesel. The federal money covers a substantial portion of the estimated $1.1 million project cost. “Part of the goal is to stimulate the local economy by using local contractors to do the work,” says Tom Young, lead engineer for the project with the Virginia Department of Corrections.
In Coeburn, officials are using $60,000 in taxpayer funds to install a boiler that uses pruned tree limbs and right-of-way clearings as feedstock — biomass — for fuel.
Federal stimulus funds are putting some green into Virginia’s push for alternative energy. Nearly $83 million in stimulus grants has been pumped into projects here that promote efficiency and energy systems that use renewable sources, according to figures from the Virginia Department of Mines, Minerals and Energy. Included is $10 million in grants for biomass demonstration projects, like those at the two Virginia prisons, that burn wood chips or converted waste byproducts to produce fuel.
Stimulus-backed energy projects eventually may spur job growth, but how many and how soon remains uncertain. The biomass projects collectively will trigger an initial 235 permanent jobs in Virginia, along with an unspecified number of jobs in construction, transportation and supporting industries. That’s according to the Virginia Department of Mines, Minerals and Energy, which administers the biomass grants.
Although stimulus funds shower money on biomass and other clean technologies, nary a dime goes to one of Virginia’s most promising renewable energy sources: the development of offshore wind south of Chesapeake Bay. The U.S. Department of the Interior’s Minerals Management Services controls 25 leases for offshore wind development here, extending roughly 12 miles due east of Virginia Beach. Combined, those projects could reportedly harness enough wind to generate 3,200 megawatts of power. “That’s the equivalent of three nuclear reactors,” says Jerry Giles, a business development official with the Virginia Economic Development Partnership. It would be enough to power about 1 million homes, or one-third of all homes in Virginia.
Researchers say wind-energy technologies have enormous potential but are not ready to make an immediate impact. Estimates by environmental groups that offshore wind could produce 20 percent of Virginia’s electricity within a decade are erroneous, says George Hagerman, director of offshore wind research with the Virginia Coastal Energy Research Consortium. A more realistic projection would be 10 percent within two decades. “That in itself is a rather ambitious build-out rate that would involve commissioning a new 300-megawatt project every two years,” Hagerman says.
Those obstacles aside, some say Virginia is poised to emerge as a major manufacturer of wind turbines and components, a situation that offers promising economic opportunities. That’s the conclusion of a 2008 report by the Department of Energy and the National Renewable Energy Laboratory. If the U.S. were to derive 20 percent of its electricity from wind, Virginia stands to gain 10,000 to 20,000 new jobs. The big advantage is Virginia’s deepwater shipping lanes in Hampton Roads, which are necessary for moving the huge equipment to market.
Two companies, both in Virginia, were the first to apply for offshore leases with federal regulators. Apex Wind Energy in Charlottesville is requesting approximately 116,000 acres to build 1,500 megawatts of wind power, or enough power for more than 350,000 homes. “We hope to have a lease this year and begin wind studies, which will ultimately determine a great deal of the economics and energy cost,” says Eamon Perrel, business development manager for Apex.
Another company, Seawind Renewable Energy Corp. of Henrico County, reportedly wants enough acreage to support 240 wind turbines, producing enough electricity for 250,000 homes.
Meanwhile, the biggest biofuel project in Virginia is proceeding, but without help from stimulus funds. Osage Bio Energy in Glen Allen plans to open a Hopewell plant in June. The facility will be capable of producing 65 million gallons of ethanol using barley rather than corn as the feedstock.
The $165 million Appomattox Bio Energy project, reputed to be the first commercial barley-to-ethanol processing plant in the U.S., is expected to create about 55 full-time jobs. Workers will begin shipping products by midsummer, says John Warren, Osage’s director of government relations and project development.
Speaking of green-energy jobs, Virginia lawmakers are getting on board. Both chambers of the General Assembly in February unanimously approved bills to make tax credits available to companies that create jobs relating to the field of renewable energy, including the manufacturing of products used to generate electricity from alternative sources. Qualifying companies could receive a $500 break on their corporate tax bill for every job with a salary of at least $50,000. And they can claim the deduction for each job they create, up to 350 jobs.
Green energy also is getting a boost from another source: Dominion Resources Inc. The parent company of the state’s largest electric utility (Dominion Virginia Power) helped start the Dominion Green Tech Incubator to nurture startup companies whose focus is on energy efficiency and clean technologies. Dominion is providing $50,000 in seed funding each year for five years to help the center get established.
Other partners include Hanover County, the Town of Ashland and the Virginia Biosciences Development Center, which will manage the incubator. It will provide assistance to startup companies with office space, financial services, business planning and management. “We have had a lot of people knocking on our door [requesting] to show us what they were doing in green energy,” says Mary Doswell, senior vice president of Dominion’s Alternative Energy Solutions division. “We’re just trying to piece together things that could be useful” in helping Virginia meet a state mandate to reduce its consumption of fossil fuels by 25 percent by 2020.