East Coast ports jockey to woo nascent U.S. industry

Source: Phil Taylor, E&E reporter • Posted: Friday, October 26, 2012

Portsmouth Marine Terminal

Cranes stand guard at the Portsmouth Marine Terminal in Hampton Roads. State officials hope offshore wind developers use the area to store and assemble turbine parts. Photo by Phil Taylor.

NORFOLK, Va. — Port officials here are vowing to roll out the red carpet for the nascent offshore wind industry.

The Port of Virginia, home to Naval Station Norfolk and the world’s largest military-industrial complex, hopes to become a home base for assembling, shipping and installing massive wind turbines for mid-Atlantic power projects.

It is among a handful of East Coast ports jockeying for a piece of what business leaders here say could be a $15 billion prize in offshore wind projects over the next decade.

“We welcome you here; we want you here,” Lt. Gov. Bill Bolling (R) told hundreds of industry officials who gathered earlier this month at the American Wind Energy Association’s annual offshore wind conference at the Virginia Beach Convention Center. “We want this to be the epicenter of this new and growing industry.

Virginia officials say their state offers a steady but powerful ocean breeze in waters that are shallow but far enough from shore to protect the coastal scenery.

Offshore wind, a keystone of the Obama administration’s energy policy, could offer significant onshore job opportunities from Savannah, Ga., to Maine, proponents said. The sheer size and weight of offshore wind turbines will require significant upgrades to docks and ships.

Virginia officials touted their port’s deep waters, unrestricted navigation and proximity to the ocean in hopes of elbowing out competitors in Baltimore; Narragansett, R.I.; and New Bedford, Mass.

The wind industry is backed by labor groups, including dock builders and pile drivers who sponsored an exhibit at the AWEA conference, in addition to environmental groups that see offshore turbines as a significant opportunity to transition away from carbon-intensive fuels.

But the industry has been hobbled by high costs, unsettled federal energy policy and, in the case of the Cape Wind project in Massachusetts, a handful of lawsuits over impacts to viewsheds, cultural resources and airplanes

Offshore wind development has occurred almost exclusively in Europe — where more than 50 projects and nearly 4,000 megawatts have been installed in the past decade, according to the U.S. Department of Energy. The United States could see up to 54,000 MW of projects in the Atlantic by 2030, DOE said.

J.J. Keever, senior deputy executive director for the Virginia Port Authority, said the building boom in Europe has spawned major land-based projects like England’s Green Port Hull, a collaboration between Siemens and the owners of the Alexandra Dock, to manufacture and export offshore wind turbines.

Siemens this summer signed a deal reportedly worth $3.1 billion to supply 300 turbines for offshore projects owned by Danish firm DONG Energy, according to the BBC. Components for those turbines would be built at the port.

“I show you that to compare it to Portsmouth Marine Terminal,” he said, referring to a 285-acre former container facility in Virginia that stands vacant along the shores of the Elizabeth River, and which port officials here are promoting as a staging area for offshore wind.

From the deck of a local tour boat, the Victory Rover, the Portsmouth terminal’s massive blue cranes could be seen standing idly along the waterfront. The terminal closed in 2010 when container-handling operations were moved to the other side of the port

A few miles north, a dump truck rumbled over Craney Island, a man-made peninsula that for decades has served as a dumping ground for muck dredged from the seabed. The Army Corps of Engineers has authorized the island’s east end to become a 500-acre marine terminal, the port’s fourth.

‘Flash in the pan’?

Keever said offshore wind could generate more than $400 million in economic growth in Virginia alone, ranging from the fabrication of turbine foundations to the outfitting of electric service platforms, charter vessels, leasing of large port landings and transmission upgrades.

Docks and boats will need to be able to support turbines weighing more than 325 tons and their subsea foundations, which weigh upward of 450 tons, according to Richard Palmer, vice president of Weeks Marine Inc., a New Jersey-based vessel contractor.

Weeks in June launched the first U.S.-built vessel designed exclusively for the installation of wind turbines at sea.

The R.D. MacDonald will elevate itself by sinking eight giant legs into the seafloor, providing a platform for a crane to lower turbines into the water..

“What we are looking for, obviously, is a continuing industry,” said Palmer. “We don’t want this to be a flash in the pan. … We need to keep the vessel working in order to pay for it.”

According to DOE, the assembly, transport and installation of offshore turbines make up about 20 percent of an offshore wind farm’s cost, far above what those operations cost on land.

The city of New Bedford, Mass., is competing with Quonset Point on Narragansett Bay, R.I., and sites in Delaware and New Jersey for the opportunity to assemble turbines for the 468 MW Cape Wind project in Massachusetts’ Nantucket Sound, which is the first to be fully permitted in U.S. waters.

Already, the project has raised $35 million in public funding and hopes to replicate the success of German port cities such as Bremerhaven and Cuxhaven, which have established themselves as staging areas for North Sea wind projects (ClimateWire, Aug. 2).

Baltimore, too, is hoping to attract projects, and has advertised its Dundalk Marine Terminal and the Sparrows Point Shipyard Industrial Complex, the former Bethlehem Shipyards, for offshore wind developers.

Maryland Gov. Martin O’Malley (D) this year proposed a bill to establish a “carve out” for offshore wind within the state’s renewable energy standard, but it died in the state Senate. The state estimates that a 500 MW wind farm off the Delmarva coast could generate as many as 2,000 manufacturing and construction jobs over five years and support an additional 400 permanent jobs once the turbines are spinning.

“We hope you will choose Maryland because no other state in America has the same combination of location, workforce and world-class facilities,” O’Malley said in a keynote speech to AWEA’s offshore wind conference last fall in Baltimore.

A study released weeks ago by IHS Inc. for the transmission developer Atlantic Wind Connection found that 7,000 MW of wind development in the mid-Atlantic would support 170,000 jobs from New York to Virginia while spurring $19 billion in economic activity over the next decade.

Power markets needed

While Virginia’s port is ideally suited to support offshore wind, the state has yet to create a market for the electricity, which is expected to cost up to three times as much as fossil-fuel-generated electricity, according to DOE.

“Virginia has been very aggressive in developing the supply chain,” said Jim Lanard, president of the Washington, D.C.-based Offshore Wind Development Coalition. “They’ve got a great port and trained workforce. Their military-industrial complex works perfectly for offshore wind.”

But, he added, “They haven’t taken the next step, which is creating a market here.”

Unlike other East Coast states courting offshore wind, Virginia has passed no mandate for utilities to purchase electricity from renewable energy.

According to Lanard, future wind farms depend on timely permitting by federal agencies, the extension of investment tax credits and, importantly at least in the near term, state policies that encourage development.

In Massachusetts, that question was answered after Cape Wind acquired contracts to sell more than three-fourths of its power to National Grid and NSTAR. Deepwater Wind, which has proposed a 30 MW demonstration project in Rhode Island waters, will sell its power to National Grid. New Jersey is looking for a buyer for the Fishermen’s Energy 25 MW wind farm.

“There are no other markets now for the sale of offshore wind into the grid,” he said. “That’s what we really need to focus on.”