Dominion Virginia Power would like to lease entire wind area off coast of Virginia Beach
- March 19, 2012
Dominion Virginia Power told the federal government Monday that it is interested in obtaining leases off the Virginia coast in an area that has the potential to generate about 1,500 to 2,000 megawatts of electricity from offshore wind turbines.
Dominion said in a press release that it expressed interest in the entire 113,000 acres the government is making available about 24 miles off the coast of Virginia Beach. The Bureau of Ocean Energy Management issued a call for information and nominations last month, and this was Dominion’s response. “Offshore wind generation holds great promise in the long term as a scalable source of emissions-free renewable electricity,” Mary C. Doswell, executive vice president-Alternative Energy Solutions, said in a statement. “Virginia is well positioned to accommodate offshore wind with the existing electric grid and world-class port facilities in Hampton Roads. The challenge remains the high cost of building this generation and bringing it to customers.”
The U.S. Energy Information Administration projects the cost of offshore wind generation in 2016 at about 24 cents per kilowatt-hour generated. This is significantly higher than the 7.3 cents per kilowatt-hour that comprise the generation portion of Dominion Virginia Power’s residential rate today of about 10.9 cents per kilowatt-hour.
As with any utility generating project, the Virginia State Corporation Commission would have to approve a Dominion Virginia Power offshore wind power generation project. If awarded a lease, Dominion said it would conduct detailed site assessment activities, including the construction of a meteorological tower to study wind strength and patterns.
The leasing area is divided into 19 whole blocks, each 3-by-3 miles, and 13 partial ones. Since navigational and environmental studies may limit areas for development, Dominion said it nominated all of the lease blocks so it would be positioned to propose a project with beneficial economies of scale.
BOEM said responses to its call could lead to a competitive bidding process for tracts where more than one expression of interest is received or a noncompetitive process if there is not more than one interested player.
Richmond-based Dominion Virginia Power, the largest subsidiary of Dominion and the state’s largest electric utility, has been involved in offshore wind studies since 2010. One found that Virginia has an advantage compared to many states because it has the capability to interconnect large scale wind generation facilities with the existing grid in Virginia Beach. Another study found cost savings were possible by building the wind facility in phases with a potential for standardization of offshore transmission infrastructure.