Citing cost concerns, Dominion Virginia Power has placed the Virginia Offshore Wind Technology Advancement Project (VOWTAP), its offshore wind pilot project, on hold indefinitely.
VOWTAP is a partnership between utility company Dominion Virginia Power and the Virginia Department of Mines, Minerals and Energy. The partners propose to build two Alstom 6 MW direct-drive wind turbines 26 miles off the coast of Virginia Beach, adjacent to the Virginia commercial lease area that Dominion won in a 2013 federal auction.
The company initially estimated that the project would cost approximately $230 million. In 2014, Dominion put out a request for proposal for an engineering, procurement and construction provider to build the project.Â
However – after receiving only one construction bid for nearly twice the amount – key stakeholders of the pilot project decided to ease the pace of development and study how to further reduce project costs.Â
Dan Genest, company spokesperson, says the lone bid was in the neighborhood of $375 million – $400 million. More discouraging, he notes, was that the estimate was open-ended – meaning unknowns surrounding the project could send the price tag significantly higher.
The decision was made following a recent meeting with the Virginia Offshore Wind Development Authority (VOWDA), a key stakeholder in the utility's offshore wind initiative. After hearing Dominion's presentation, VOWDA suggested forming a task force – including a broad spectrum of offshore wind interests – could help the project.Â
The decision has far-reaching impacts, particularly with milestones set by the U.S. Department of Energy (DOE), as part of Dominion being named a recipient of the DOE's second round of funding to advance U.S. offshore wind technology.
Dominion has received two DOE grants totaling $51 million for its wind turbine demonstration project. If the project is approved, the company plans to build two 6 MW turbines and test design features intended to lower the cost of
construction, reduce maintenance and withstand hurricane-force winds.
Genest says Dominion will apply for an extension with the DOE. The DOE did not return phone calls at this time.
Further, Dominion also will not be able to meet its July timeline with the Virginia State Corporation Commission (VSCC). Dominion was hoping to file an application with the agency on cost-recovery. However, Genest says, he hopes to meet with VSCC within a year.