The Virginia coast is apparently in high demand—specifically an area of 113,000 acres that sits 24 miles off the coastline. The U.S. Bureau of Ocean Energy Management (BOEM) issued a “Call for Information and Nominations” for the federal waters in February and received proposals from eight companies who want to develop offshore wind power there.
And now the big power utility Dominion Virginia Power (DVP) is interested in the whole shebang—which could produce an estimated 1,500 to 2,000 megawatts (MW) of energy—with one big qualification: cost.
Offshore wind energy holds a lot of promise; however, the cost of building the infrastructure and the necessary transmissions lines to get it where it needs to go creates quite a premium. “Virginia is well positioned to accommodate offshore wind with the existing electric grid and world-class port facilities in Hampton Roads. The challenge remains the high cost of building this generation and bringing it to customer,” said Mary C. Doswell, the company’s executive vice president of Alternative Energy Solutions.
The U.S. Energy Information Administration estimates that offshore wind generation will cost around 24 cents per kilowatt-hour (kWh) in 2016. This is several times DVP’s current generation cost of 7.3 cents/kWh for energy sold at a residential rate of 10.9 cents. The company received a two-year, $500,000 grant from the U.S. Department of Energy to find innovative ways to reduce offshore wind costs by 25 percent.