By MEL LEONOR Richmond Times-Dispatch
Dominion Energy is planning to work with the Spanish company Siemens Gamesa to supply wind turbines for its massive offshore wind farm proposed near Virginia Beach, an agreement Dominion says could bring jobs and investment to Virginia.
Dominion said the tentative agreement, which won’t be finalized until later this year, could attract economic activity to the state as the two companies look at Virginia’s port as an asset for the manufacturing of the turbines.
The announcement comes months after the monopoly utility unveiled the details of the $7.8 billion project, which would yield the largest offshore wind farm in the country. Anchored on 112,800 acres 27 miles off the coast of Virginia, the facility would power 650,000 homes at peak wind, Dominion said.
Last month, Gov. Ralph Northam proposed large investments to make Virginia a leader in the emerging industry, a goal he outlined in the summer as he promised the industry the “necessary legislative and public policy support.”
Right now, most U.S. based offshore wind projects purchase parts from European companies manufacturing parts abroad. In his budget rollout, Northam proposed $40 million to upgrade the Portsmouth Marine Terminal, “to attract offshore wind supply chain investments,” according to a summary from his office.
That investment is contingent on a partnership with a private entity. It’s unclear whether Dominion or Siemens Gamesa could be that entity.
Northam also budgeted an additional $275,000 per year for the creation of a new “Office of Offshore Wind,” which would “coordinate with local, state and federal partners to bring supply chain and other industry jobs to Virginia.”
Dominion said its contract with Siemens Gamesa is not contingent on investments from the company in Virginia, but it will be a “key consideration,” Dominion Senior Vice President Bill Murray said.
Murray said development of the turbines in Virginia could lower the cost of the project by cutting back on shipping costs.
Dominion expects an agreement with the company to be finalized by the end of the year, with manufacturing starting in 2023. Dominion expects to begin the federal permitting process for the project at the end of the summer.
Dominion also will need key approval from state regulators by 2023 to move ahead with its plans.
The cost of Dominion’s offshore project, like its others, would be borne by Virginia ratepayers through their utility bills — an increase that would require the approval of the State Corporation Commission.
The commission weighed in on Dominion’s offshore wind plans in November of last year — when Dominion sought approval for a $300 million two-turbine pilot — lambasting the project but acknowledging its hands were tied by a directive from the General Assembly to approve it even if it found the project not in the “public interest.”
On the large-scale wind project, the commission said at the time that Dominion’s own analysis had found that “a larger full-scale offshore wind generation facility, which the [pilot] project is intended to demonstrate, is not expected to be economically competitive with other options for the next 25 years under any scenario studied.”
The General Assembly hasn’t issued a directive to the SCC on the large-scale offshore wind project, like it did for the pilot. The utility may seek one during the legislative session.