Va. Power watching first U.S. wind energy lease sale

July 25, 2013 by  
Filed under Green Energy News

Dominion Virginia Power will keep its eye on the U.S.’ first offshore wind energy lease sale next week.

The federal auction of an area off the shores of Rhode Island and Massachusetts will be held Wednesday.

“It’s totally new,” said Mary Doswell, Dominion Resources Inc.’s senior vice president for alternative energy solutions. “No one knows what to expect.”

Wind energy officials in the state hope the results of the New England sale will be made public before Sept. 4, when the second federal auction — one for a lease in Virginia waters — takes place.

Dominion Virginia Power, the state’s largest electric utility, will bid Sept. 4 to develop commercial wind turbines in the Atlantic Ocean about 25 miles from Virginia Beach.

The auction will offer a single lease of 112,799 acres off northern Virginia Beach with a beginning price of $2 per acre, or $225,598.

Dominion Virginia Power would not say how much it was willing to bid for the area.

A wind energy farm could generate up to 2,000 megawatts of electricity, the Richmond-based company said, which would be roughly the size of the utility’s North Anna nuclear power station.

“The key is the cost,” said Doswell, speaking after a meeting of the Virginia Offshore Wind Development Authority on Wednesday. “Our whole focus is bringing the cost down.”

“This is a multibillion-dollar investment,” said Bob Matthias, the authority’s chairman.

The U.S. Energy Information Administration estimates the cost to build a commercial-scale offshore wind farm at $6,230 per kilowatt of generating capacity. The EIA also places the installed cost for a modern natural gas power plant at about $1,000 per kilowatt.

“Working offshore is tremendously expensive,” Sally McNeilan with Fugro Geotechnics and Survey told the Virginia Offshore Wind Development Authority, meeting at the Virginia Housing Center in western Henrico County.

However, the EIA also said capital costs for onshore wind decreased by about 13 percent since 2010, primarily due to lower wind turbine prices. And the fuel — natural wind — is free.

Charlottesville-based Apex Clean Energy and six other companies also are eligible to bid in the Sept. 4 offshore lease sale.

The six firms are Energy Management Inc. of Boston; EDF Renewable Development Inc. of San Diego; Fishermen’s Energy LLC of Cape May, N.J.; Iberdrola Renewables Inc. of Portland, Ore.; Sea Breeze Energy LLC of Philadelphia; and Orisol Energy U.S. Inc. of Ann Arbor, Mich.

Five of the nine eligible bidders for the New England lease are among the potential Virginia lease bidders.

The start of construction could be a decade or more in the future, officials at the wind authority meeting said, due to the planning, research, testing and governmental approvals required.

The longer it takes for each part of the offshore development, Matthias said, the longer it will take to start producing power from oceanic winds.

Still, said Doswell of the development process, “it’s moving.”

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