113,000 acres off Virginia coast up for auction for wind energy

Source: By Tamara Dietrich, Daily Press • Posted: Wednesday, September 4, 2013


The Bureau of Ocean Energy Management will auction nearly 113,000 federal acres off the coast of Virginia Wednesday to develop a commercial wind farm that experts say could one day supply enough clean energy to power about 700,000 homes.

It’s the second such auction — or competitive lease-sale — for renewable energy in federal waters ever conducted. In July, BOEM auctioned nearly 165,000 acres off Rhode Island and Massachusetts that, when fully developed, could power more than a million homes.

The auctions are praised by environmentalists, industry insiders and government officials for their potential to create jobs, address climate change and provide more energy security. The parcel off Virginia lies nearly 24 miles east of Virginia Beach, on the Outer Continental Shelf.

Virginia Dominion Power is one of eight qualified bidders and generally considered the one to beat. Dominion is the largest power company in the state and the biggest participant in the auction.

It has yet another advantage, experts say: As a vertically integrated company under state regulations, it owns and operates its own generation, transmission and distribution systems. Should another offshore developer win the bid, it would need to find a customer for the electricity at a level of revenue to cover its investment and make a profit. Such a scenario could turn off some bidders.

“There may be some who will decide if Dominion’s got a lock on it, they won’t bother to do it,” Ivy Main, the Sierra Club’s renewable energy chairwoman, said Tuesday in a conference call with reporters. “But it may be that they’ve got it figured out as to where they could sell the power.”

Jim Lanard, president of the Offshore Wind Development Coalition, said Virginia is uniquely positioned for offshore wind farms.

“You’ve got these great resources — ports, deep water, shipping routes that allow stuff to move and a great trained workforce eager and ready to get involved in the offshore energy industry,” Lanard said.

BOEM is expected to announce a provisional winner at the end of the bidding process, and make it official in early October after an antitrust review.

According to the Sierra Club, construction would begin no later than 2020 and be completed by 2028. The overall duration of the lease sale is 38 year

Offshore bidders

Eight companies are prequalified to bid Wednesday on nearly 113,000 acres off the coast of Virginia for wind energy development:

Apex Virginia Offshore Wind LLC

Virginia Electric and Power Company (Dominion Virginia Power)

Energy Management Inc.

EDF Renewable Development Inc.

Fishermen’s Energy LLC

Iberdrola Renewables Inc.

Sea Breeze Energy LLC

Orisol Energy U.S. Inc.

Information provided by the U.S. Department of the Interior