Wind ban to wind hub? Inside N.C.’s renewable shift

Source: By David Iaconangelo, E&E News reporter • Posted: Sunday, May 31, 2020

North Carolina is looking to attract wind manufacturers like Siemens Gamesa, which unveiled the world’s most powerful turbine for use in a Virginia project. Siemens Gamesa

A state known as a hotbed of anti-wind opposition is now aiming to become a manufacturing hub for East Coast offshore wind — a move that could have ripple effects for the nation’s renewable industry and sway the economies in multiple states.

But as it seeks to turn the page, North Carolina is facing both natural constraints and a crowded field of competitors.

The state’s Department of Commerce launched a process this month that will produce a study on how the state can lure manufacturers of wind turbines, blades and other parts destined for the growing number of Atlantic offshore projects. State environmental authorities had called for such a study in their clean energy plan, which was requested by Gov. Roy Cooper (D) and released in October.

“The objective is to determine how North Carolina can successfully position itself to compete in [offshore wind], as well as pinpoint our state’s advantages” for manufacturing as well as turbine staging and assembly work at state ports, wrote the department in a call for consultants who would lead the study.

Yet North Carolina’s anti-wind past may chill investment in new offshore wind projects, which are often a prerequisite for building a local supply chain, analysts say. An 18-month ban on wind projects was enacted in 2017. A failed bill that would have extended it for three years was aimed mostly at onshore proposals, but highlighted much of the coastline as off-limits to development as well, with questionable consequences for turbines located farther out at sea.

The state also lacks a policy mandate for buying offshore wind power, a staple of Northeastern state policy that has driven the emergence of industries elsewhere. Any legislation that created such a mandate would need to get by the current Republican leaders of the state Senate and House, who led work on the original moratorium and the failed follow-up.

Manufacturers may want to see more proof that North Carolina is dedicated not just to fabricating blades and turbines, but also to producing a new source of business from wind farms off its shores, said Katharine Kollins, president of the Southeastern Wind Coalition.

“One of the things you’ll hear frequently from [original equipment manufacturers] is, if you want a supply chain, you have to commit to offshore wind development.”

Avangrid Inc., which paid $9 million in 2017 for the rights to a federal lease area off North Carolina that could produce up to 2,500 megawatts of power, is one of the companies looking for policy certainty.

“In both North Carolina and Virginia, public policies supportive of offshore wind are critical to moving the … industry forward,” Avangrid communications manager Morgan Pitts said in an email.

North Carolina’s action puts it in competition with other Eastern states that could be home to manufacturers of wind components.

This week, for instance, Siemens Gamesa announced it was scouting locations for a U.S. facility that would manufacture parts for the world’s most powerful turbine. That 14-gigawatt model will be used in a Dominion Energy Inc. pilot project off nearby Virginia, where a 100% clean energy law is expected to unleash a tide of new offshore wind farms. Those projects will need to source turbines and parts from somewhere, along with a port where they could be assembled before being installed at sea — the sort of work that advocates think could potentially be done in North Carolina.

Officials in states like New York and Massachusetts are deep into preparations to refit port facilities and train workers, and one town in New Jersey has signed a memorandum of understanding with global giant Ørsted A/Sto build monopile foundations.

‘A lot of question marks’

In some ways, North Carolina has some of the most auspicious conditions for offshore wind on the Atlantic coast. It has the second-largest area of available waters and second-highest potential for yearly generation, trailing only Florida, according to the National Renewable Energy Laboratory.

Like other Southern states, wind speeds “are not the highest,” said Walt Musial, offshore wind lead at NREL, and there’s “potential for major hurricanes. … But there is a substantial resource based on developable area.”

The clean energy plan produced last fall by the Cooper administration calls for the state to look into additional legislative and regulatory actions it can take to encourage offshore wind development.

A quirk of geography may count against it, though: Most of its population lives in cities located well inland, meaning transporting offshore wind power to those load centers would require much higher transmission costs than in states like Massachusetts or New York, where major cities are located along the coast.

“Charlotte and Raleigh are further inland. We’d still have a bit of a transmission issue if we built that out there,” said Harrison Fell, an environmental economist at North Carolina State University.

“It seems like we’ve had a lot of discussions about offshore wind,” he added. “But it’s still in its infancy. I think there’s a lot of question marks.”

North Carolina entered the conversation early in the development of the East Coast offshore wind industry. Avangrid’s $9 million bid three years ago for the rights to a federal lease area off North Carolina would generate three times more power than the nation’s first utility-scale project in Massachusetts, which would support about 400,000 homes.

A year later, interest from deep-pocketed European utilities and oil and gas firms sent the cost of the leases skyrocketing. In a federal auction, three companies paid a cumulative $405 million for areas that could generate 4,100 MW.

Avangrid is carrying out preliminary studies of wind and wave conditions in its North Carolina lease area, although it remains unclear how committed it is to building turbines there.

Along with watching state policies, the company’s decisions about the project “will be driven by the customer (or customers),” Pitts said.

Offshore wind would likely be “critical” to utility carbon reduction goals in the region, and North Carolina’s effort to study ports and supply chains was “a good step,” he said.

If it does build turbines, the company probably won’t help North Carolina decarbonize, however. Avangrid has reserved a spot in the PJM Interconnection queue to sell power from its Kitty Hawk project into Virginia.

North Carolina utility giant Duke Energy Corp. doesn’t seem bent on developing offshore wind, either. The company has a goal of achieving net-zero carbon dioxide emissions by 2050, but its plan for getting there focuses on carbon capture, advanced nuclear and onshore renewables.

As for the Legislature, Republican supporters of the moratorium and failed bill said they were meant to ensure that turbines did not interfere with military activities at Jacksonville’s Marine Corps Base Camp Lejeune and other bases, although the Department of Defense has its own well-established process for reviewing the compatibility of energy projects.

Clean energy advocates say that anti-wind sentiment is fading in the Legislature.

“It’s still not a slam-dunk. But there’s been great progress,” said Mark Fleming, president of Conservatives for Clean Energy.

Some Republicans who won primaries in 2018 while styling themselves as supporters of renewables have become influential members within the party, he added. And the Trump administration’s signals of support for offshore wind have aided its cause in North Carolina.

“That helps a lot. It helps the conservative conversation in ways we don’t have with other types of clean energy.”