The Good:
Following the General Assembly’s passage of the 2018 Grid Modernization Act, which declared small-scale offshore wind energy generation to be “in the public interest,” Dominion Energy is now ready to START the process of considering adding offshore wind energy to their portfolio. Virginia has a tremendous potential to generate offshore wind energy, and other states along the eastern seaboard have been making strides in this direction. It’s great to hear Dominion arguing that “it is necessary to develop and rely more heavily on renewable energy sources, and to diversify the overall energy mix,” although their actions to date haven’t matched this rhetoric.
This process will begin with a modest demonstration project, to assess the feasibility of wind energy, and to collect data, with the future goal of implementing a larger-scale offshore wind farm. Dominion filed a request for approval from the State Corporation Commission (SCC) this week, and given that the 2018 bill specifically declared such small offshore wind projects to be in the public interest, the SCC is likely to give its approval.
The project when built—by the end of 2020–will consist of two wind turbines located 27 miles offshore at Virginia Beach. The water is federal territory. The exact location was selected taking into account vessel traffic, military zones, and avian nesting wildlife. The turbines are not visible from the shore, due to earth curvature. These two turbines are connected by cable to one another, and then connected to the shore, at Camp Pendleton, to a “beach cabinet,” which is then linked up to the rest of the energy grid.
Each turbine has 6MW capacity, for a total of 12MW. (Just for scale, Dominion’s total capacity is on the order of 24,000 MW.) The “large-scale” project that might ultimately result from this—down the road in 2024 or later—would have a capacity of around 2000MW.
The Bad:
This is only a demonstration project, for the purpose of researching offshore wind energy generation and distribution, although lots of other industry data on wind already exists. In fact, it is intentionally the smallest such project (ostensibly to spend as little as possible for something that might not yield positive results) that can produce the data needed on capacity, reliability, wake effects, and how weather events affect generation. When Dominion has only 3% of its sales coming from renewables, and the Trump administration is rolling back environmental regulations daily, the need for this kind of investment feels much more hair-on-fire critical than indicated by a small-scale demonstration project.
Additionally the financing of the $300 million project is somewhat sketchy. Dominion will not ask for a rate adjustment clause to pay for the project, but before anyone rejoices over that, it’s likely only because the grid transformation bill allows them to request a customer reinvestment credit offset if they don’t try to use an RAC. Let’s just operate under the assumption that consumers will pay the full cost of the projects either through higher rates or through the credit offset or both, and no one will have to be disappointed later, okay? At this point, we can complain about rates or we can complain they aren’t investing in renewables, but we can’t address both simultaneously under the current Virginia legislative and regulatory system.
The Ugly:
Speaking of the legislative system, listening to the Dominion executives repeatedly refer to the “public policy goals articulated by the General Assembly,” but knowing that those goals were by and large written by Dominion itself leaves me wondering how much sooner we could have gotten started on this critical research, had Dominion …. uh, helped the General Assembly to articulate such goals sooner.
Additionally, the filing repeatedly mentions that the “General Assembly” has declared offshore wind energy projects in the public interest—essentially removing the SCC’s excuse for not approving the projects. But again, if Dominion wrote the bill that essentially declares projects they’ve been planning since 2011 to undertake to be in the public interest, so that the SCC will approve these projects—it’s once again really unclear who is regulating whom.
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