Dominion Virginia Power’s plan for a pilot program to generate electricity from offshore wind turbines is back on ice after the federal government pulled $40 million it had pledged to support the effort.
The Department of Energy withdrew the funding because the electric company could not guarantee it would have the turbines up and running by 2020, Dominion Senior Vice President Mary Doswell said.
The project would erect two wind turbines 24 miles off the coast of Virginia Beach. When running full out, they could generate 12 megawatts of electricity, enough to power as many as 3,000 homes.
“We are disappointed, but the project isn’t necessarily dead,” Dominion spokesman David Botkins said.
Doswell said Dominion would determine its next steps after consulting with partners in the project, as well as with governments, researchers and community groups that have been involved in efforts to develop wind power.
Those partners include Newport News Shipbuilding, the National Renewable Energy Laboratory, the Virginia Tech Advanced Research Institute and a General Electric Co. unit.
Doswell said Dominion has been aiming to have the turbines running before 2020, but the high cost of the project, difficulties in nailing down construction contracts and challenges in winning regulatory approval made it hard to guarantee that start date.
“We still believe that offshore wind has a great potential to deliver clean, renewable energy to Virginia,” she said.
“However, we also recognize the unique regulatory and cost challenges involved in our project and appreciate the DOE’s desire to support other projects that may have an earlier opportunity for fruition,” she added.
In an email to the Sierra Club, Alana Duerr, an engineer with the DOE’s Wind and Water Power Technologies Office, said that unlike projects off the New Jersey coast, in Lake Erie and off the coast of Maine, “Dominion faced additional challenges that hindered the project’s path.”
Duerr said Dominion’s design for a foundation for the towers that could survive a hurricane will be important for any future wind projects off the Atlantic or Gulf coasts.
“By pioneering the leasing process in federal waters, the project will help to inform future commercial-scale leasing processes,” Duerr added.
The federal money would have covered about 10 percent to 13 percent of what Dominion now expects the project to cost. The project faltered last year when the one bidder that said it could do the work quoted a price of $375 million to $400 million.
Dominion rebid the work this year. That effort cut tens of millions off the first quote, basically by breaking the project into several separate contracts.
That end result – a cost between $300 million and $380 million – was still well above the $230 million Dominion originally planned to spend, but was enough of a reduction to keep the effort alive.
Dominion won the lease to the site with a $1.6 million bid in 2013. The energy department awarded a grant for the project in 2014.
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