A poll by the National Resources Defense Council shows 88% of Virginians want the state to use more wind and solar power, and the federal government has offered the state 47 million dollars to build a couple of turbines offshore, but Dominion Power is hesitant. In part three of our series on the promise of wind power in Virginia, Virginia Public Radio’s Sandy Hausman reports on why the utility is reluctant to begin work on offshore wind, and what it might take for the state to move forward.
Virginia is blessed with 112 miles of coastline. Twenty-seven miles out, the water is still relatively shallow, making it ideal for construction of wind turbines, and there’s usually a steady ocean breeze.
“Offshore wind blows about 70% of the time, whereas in the central part of the country, 30-40% of the time.”That’s Jon Wellinghoff, former chairman of the Federal Energy Regulatory Commission. He was appointed by President George W. Bush, continued to serve during the Obama years, and is now a lobbyist for green energy companies.
He doesn’t see Virginia moving forward with development of offshore wind, because it’s expensive, and by law, one company – Dominion Virginia Power -- controls most of the market.
“If we’re going to take advantage of the new technologies that are out there, not just wind and solar but also technologies that can help the grid operate more effectively, can help consumers control their costs, then I think we have to restructure the system.”
It’s hard to imagine Virginia’s legislature opening the energy production market to competition. If you disregard donations from political parties, Dominion is the state’s largest campaign contributor.
And restructuring the market for electric power is no guarantee. Many coastal states have done so, but only one – Rhode Island – is building offshore turbines.
From Charlottesville, Elisa Wood edits MicroGrid Knowledge.com. She says offshore wind is expensive to build, and investors are hesitant after seeing what happened to Cape Wind. Supporters of that $2.6 billion project in Nantucket Sound applied for their first permit in 2001, but opponents said it would spoil their view, could harm commercial fishing and pose a navigational hazard.
“A very small number of very wealthy people have blocked that project now for many, many years – spending tens of millions of dollars themselves, and costing the developer the same amount of money. It’s very difficult to get investor interest because of the chill created by Cape Wind.”
Here in Virginia, the turbines would be so far from shore that the view would not be an issue, and the European experience suggests no harm to fish, birds or marine mammals, but there’s another impediment. Rates for electricity in New England are relatively high. Again, energy expert Elisa Wood.
“Where pricing is high, we see more innovation, because they are looking for the solutions.”
But Dominion offers fairly inexpensive power thanks to nuclear plants paid off long ago and cheap supplies of coal and natural gas. By law, if Dominion wants to bill its customers for offshore wind turbines, it must get approval from state regulators, and they must consider cost. Jason Lehmann is an industry editor at SNL Financial.
“They would have a very tough time justifying to state regulators recouping investment in offshore wind when there are other, cheaper sources of generation available at the moment.”
The cost of building offshore wind farms would likely come down if this country were to do more of it, but because Rhode Island is the only builder, there are few companies with the expertise and equipment to do the job.
That might explain why, when Dominion asked for bids to build a couple of turbines off Virginia Beach, only one firm submitted a qualified bid, and it was at least $145 million more than the utility was prepared to spend.
No word yet on when, but the company has said it will meet with members of the Virginia Offshore Wind Development Authority to discuss how to lower costs.