Governor’s conference highlights challenges and opportunities in making Virginia an energy lea
- October 13, 2010
Can Virginia become the energy capital of the East Coast? That mission, as outlined by Gov. Bob. McDonnell Wednesday during a state conference on energy inspired debate, discussion and doubt.
While Virginia enjoys a strategic mid-Atlantic location, The Governor’s Conference on Energy, which continues through Thursday, drew about 1,000 people to the Greater Richmond Convention Center. They came to hear speakers from throughout the industry talk about the opportunities and challenges of making Virginia an energy leader.
Several noted that Virginia is well positioned to stand out with a mid-Atlantic location, a diverse supply of energy sources and a heavy industrial infrastructure at the Port of Virginia that would lend itself to the development of offshore wind power.
“There’s so many new jobs and capital investment and tax revenue that can be gained from a vibrant, growing, thriving energy industry,” McDonnell said during a lunchtime address. “That’s why we put this conference together. To make this dream of Virginia being the energy capital come true.”
The governor noted a growing cluster of nuclear companies in Lynchburg, Dominion’s plans for a third new nuclear reactor in Louisa County and last week’s announcement by Northrop Grumman that it will use a team of Virginia engineers in the development of a new wind turbine project off the U.S. coast as examples of the state’s leadership potential. He also supports the increased development of renewable sources and the drilling of oil and natural gas off Virginia’s coast, which would require a federal permit.
Yet several speakers pointed out challenges. Unlike many states, Virginia has not passed a renewable portfolio standard (RPS), mandating that a certain percentage of its energy generation portfolio come from alternative sources. Altogether, 30 states have legislative mandates, while seven others, including Virginia, have non-binding voluntary goals.
Jeramy Shays, with the American Council on Renewable Energy, said during a panel discussion that Texas was successful in developing market demand for wind power after adopting an RPS. That state also created low-interest loans to help with financing needs. The upshot, Shays said, was that by 2009, wind was generating 10,000 MW of power in Texas. “That happened 15 years ahead of schedule and produced 11,000 jobs in the process,” she said.
Other speakers on a panel that focused on the development of alternative and renewable energy agreed that a legally mandated standard is a major market driver when it comes to attracting investment capital.
At this time, only about 3 percent of the country’s and Virginia’s power generation comes from renewable sources, so there is plenty of room for growth in the sector. Steven Taub, senior vice president of investment strategies for GE Financial Services, said his firm has a $21 billion investment portfolio that provides capital across the energy spectrum.
On its venture capital side, GE currently has a portfolio of 24 companies in renewables “from early-stage development to companies that have gone public and are well on their way to scale up,” Much of the spending has been in wind power, Taub said.
A panel on the development of offshore wind off Virginia’s coast drew a standing-room only crowd. Virginia has an existing infrastructure that could be leveraged to support the industry, including the shallow waters off Hampton Roads, an industrial-trained, blue -collar work force and an expansive port. “We have so many assets that we can put into play,” said Tom McNeilan, a vice president with Fugro Atlantic in Norfolk.
Yet, many obstacles remain, including a federal permitting process that can take seven to nine years. “We have a pretty steep road ahead of us,” said Theo de Wolff, a leading pioneer in offshore wind and a principal with Seawind Renewable Energy Corp.
The recent restructuring of the federal permitting agency after the Gulf oil spill, didn’t help, de Wolff added. He welcomed the creation of the new Offshore Wind Energy Authority in Virginia by this year’s General Assembly, and said that state set a specific goal for the industry, such as 1,000 MW of power coming from wind by 2020.
The conference featured panels and about 175 speakers on an array of topics. Steven R. Herling, vice president of planning for PJM, a regional transmission organization based in Pennsylvania. that serves Virginia and 12 other states, said his company has sent a team of six people. “It’s a great way to find out what’s going on in the industry. I liked the discussion on the business side, of what it takes to make it happen,” he said.
But not everyone was impressed. Glen Besa, Virginia chapter director for the Sierra Club, said, “This is a conference in search of a purpose. The governor offered no new initiatives to demonstrate how he would make Virginia the Energy Capital of the East Coast.”
According to a report issued this week by the Sierra Club, Virginia is falling behind in attracting new clean energy jobs, because other states such as such as New Jersey, Maryland and Delaware are offering more programs, such as mandatory goals and tax incentives, to boost the development of renewable energy.