DOE Will Evaluate Offshore Wind Alternates Should Down-Select Awardees Falter

Mark Del Franco
Written by Mark Del Franco
on June 11, 2015 No Comments
Categories : New & Noteworthy

It has been 13 months since the U.S. Department of Energy (DOE) selected Dominion Virginia Power, Fishermen's Energy and Principle Power as the winning recipients in the next round of funding for innovative offshore wind technologies.

The DOE, which is providing up to $46.7 million to each recipient over four years to complete the projects, selected these demonstration projects based on their ability to innovate and cut costs. However, red tape and projected construction costs have cast doubt on the future of Fishermen's and Dominion Virginia Power.

Last month, the Appellate Division of the Superior Court of New Jersey ruled against Fishermen's, claiming that the New Jersey Board of Public Utilities wrongly denied approval of the wind power project. Although Fishermen's plans to appeal the ruling, hopes are beginning to fade that the developer can resurrect the project.Â

Last April, Dominion Virginia Power placed its Virginia Offshore Wind Technology Advancement Project pilot on hold because of spiraling costs.

The third DOE awardee, Principle Power, continues to move forward with its 30 MW floating offshore wind farm, proposed for the deep waters off Coos Bay, Ore.

Given the uncertain status of both projects, the DOE says it could consider two of the runner-up projects it selected as alternates if either, or both, of the winning projects cannot move forward.

The program runners-up – Lake Erie Energy Development Corp.'s (LEEDCo) Icebreaker and New England Aqua Ventus I, a floating wind concept backed by University of Maine-led DeepCwind Consortium – were awarded $3 million in funding by the DOE at the time of the May 2014 announcement.

The program is broken into five budget periods with a review between periods. Currently, the three projects are in budget period two, which ends later this summer.

To date, the DOE has dispersed $4 million each for budget period one and $6.7 million for budget period two.

According to the DOE, the second budget period requires completion of all necessary grid interconnection requirements, as well as off-take agreements. The DOE says that awardees will not move into the third budget period – nor receive additional funding – until budget two requirements are met.

Notably, the DOE maintains that although Fishermen's was denied in its pursuit of a power purchase agreement using New Jersey's offshore renewable energy certificates (ORECs), the DOE does not require that the developer to use ORECs specifically. In other words, the DOE would have no issue if Fishermen's can find an alternative off-take agreement within the time remaining in the budget period.

As for Dominion, the DOE says it is committed to working with Dominion in an open and transparent manner to determine whether it can actively manage this project towards a successful conclusion.

If after formal review, the DOE decides that a project cannot move forward, the federal agency will evaluate the status of the alternate teams, including the alternates' readiness and ability to meet the program's goals, objectives and cost-share requirements.

Additionally, the DOE will evaluate whether the alternates have addressed the shortcomings noted by the independent merit review committee in last year's down-select process.

In the meantime, the alternates continue to move forward.

Habib J. Dagher, principal investigator for the DeepCwind Consortium, declined to speculate on taking the place of Dominion or Fishermen's. He would only say the following:

‘We have been focused on working hard on the design of New England Aqua Ventus under the current DOE contract, and making excellent progress.’

For his part, Lorry Wagner, president of LeedCo, anticipates Icebreaker's engineering design to be completed by the end of the year. He also reports ‘significant progress’ on the commercial elements of the project.

‘We stand ready as an alternate in the Advanced Technology Demonstration project program should DOE decide that Icebreaker has a greater likelihood of success than one of the other 3 selected projects.’

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