The Southeastern Wind Coalition (SEWC) appreciates the opportunity to provide comments on Virginia’s 2018 State Energy Plan. SEWC is a non-profit organization that focuses on education and outreach to advance the with industry in the Southeast. We take an objective, data-driven, and business-focused approach to understanding and communicating the economic case for wind energy.

The 2018 State Energy Plan should incorporate both land-based and offshore wind in its analysis of the vision for the energy policy of the Commonwealth over the next ten years. These two generation sources both have the potential to provide a wide range of benefits to Virginia. In addition, the Commonwealth should strive to implement the appropriate suggestions coming out of State Energy Plan and other processes in order to continue the positive momentum already building in the state towards growing the offshore wind industry.

Land-Based Wind

According to the National Renewable Energy Lab (NREL) Virginia has 9,539 megawatts (MW) of potential land-based wind capacity. While lower than some neighboring states, this figure still provides the potential for several land-based projects. No land-based wind projects are currently operating in the state. However, Virginia does have one permitted project – Apex Clean Energy’s Rocky Forge project. Once completed, Rocky Forge has the potential not only to generate clean electricity for Commonwealth ratepayers, but it will also provide economic benefits to local communities and the state. 

The Apex Rocky Forge wind energy project would provide an additional $20-$25 million in state and county tax revenue over the life of the project with millions of dollars expected to be injected into Botetourt County’s economy. Figures like these are common for wind projects.  Virginia neighbors in eastern North Carolina, Pasquotank County and Perquimans County, have realized a tax revenue increase of over $500,000 a year from the Amazon US East wind farm.  Virginia should capitalize on its abundant wind resources to provide tax revenues that can go to local schools, emergency services, and other county funded projects.

Landowners in Botetourt will also see significant economic benefits from the wind farm. Leases from the Rocky Forge project would provide landowners with a stable source of revenue for 30 years. Because of the limited physical requirements for wind turbines, landowners are able to use the leased land for a host of other purposes, including agriculture.

Finally, the Rocky Forge Wind project will likely require 150 full-time equivalent jobs during the construction phase and 7 full-time permanent operations and maintenance jobs.  The median annual wage for wind turbine technicians in 2017 was $53,880 and was one of the fastest growing occupation in the country. Wind farms can also be a tourist attraction providing an additional boost to the areas around the wind farm. Along with clean and renewable energy, wind farms can bring economic benefits to local, rural economies through job creation and tourism.

Figures like these are in line with other projects in the region, and similarly sized projects in the state would likely result in similar benefits. Land-based wind represents an opportunity to promote clean energy and economic development in the Commonwealth, and should be factored into any forward-looking state energy plan.

Offshore Wind

Offshore wind is already seeing significant, rapid development along the East Coast. If Virginia wants to capitalize on this new industry and capture a portion of the billions of dollars this industry will invest along the East Coast in the form of new manufacturing facilities, Virginia must continue sending strong signals to the industry that state is serious about recruiting these facilities and promoting an expansion of demand in the region. A Department of Mines Minerals and Energy (DMME) study found that locating offshore wind construction and manufacturing activities in Virginia would create over 1,500 direct jobs. These are high-paying, skilled jobs that are highly sought after. As companies begin to look at siting their new manufacturing facilities, the factor that will be at the forefront of the decision is demand proximity.

Offshore wind development proximity is the most important factor in securing the large scale manufacturing that states across the Eastern seaboard are vying for. Blades manufactured for modern offshore wind turbines can reach a length of 107m. Components this large can only be fabricated and transported on the water due to their sheer size. Towers, foundations, and nacelles must all be assembled in ports, creating an entire ecosystem of Tier 2 and 3 manufacturing facilities around selected ports. Ancillary companies will also be incentivized to locate near these facilities in order to be closer to partners and customers. In an effort to secure these manufacturing powerhouses, states north of Virginia have made commitments to build over 8GW of offshore wind by 2030. Virginia must encourage the buildout of several thousand MW of demand in order to compete with the Northeast.

Virginia’s two turbine, 12 MW demonstration project is a good start and will provide valuable lessons learned for building offshore wind in the region. However the more Virginia can do to encourage the full build out of Dominion’s commercial lease area at 2-3GW, the higher likelihood the state is a serious contender for major component manufacturing. A state Offshore Wind Master Plan would outline Virginia’s path to complete a full buildout of our offshore wind resources, including Dominion’s commercial lease area. A Master Plan would help to direct future actions in a purposeful and intentional way in order to most effectively entice the industry to locate in the Commonwealth. With the State Energy Plan’s offshore wind track, a ports analysis previously commissioned by DMME, and the work from DMME’s supply chain roadmap already underway, much of the effort required for an Offshore Wind Master Plan is already complete.

While one historically significant hurdle for offshore wind was cost, this concern is quickly becoming obsolete. With Europe leading offshore wind development over the past decade, they have shown that economies of scale in manufacturing and development lead to rapid price declines. Orsted’s Hornsea Project Two, located in the UK, recently won a bid with one of the lowest prices for offshore wind ever at 57.5GBP/MWh (~$76/MWh). In addition, a letter recently published by the Massachusetts department of Energy Resources shows that the developers of the 800 MW Martha’s Vineyard project, Avangrid Inc. and Copenhagen Infrastructure Partners, expect to provide power and renewable energy credits for $65/ MWh. Thanks to ongoing technological advances and U.S. manufacturing capabilities, the U.S is likely to see a similar, if not faster, price drop compared to Europe.

The State Energy Plan should also outline, in a meaningful way, how offshore wind will help contribute to the Commonwealth’s generation diversity. Offshore wind provides a hedge for both fuel availability as well as price, as well as a predictable and stable fuel source. Additionally, the fuel source is free and not subject to price fluctuations that affect traditional generation sources. Offshore wind not only helps protect Virginia’s fuel mix against price fluctuations, but would also help to meet the state’s carbon reduction goals.

Wind energy, both land-based and offshore, has the ability to provide clean, sustainable energy while growing the economies of the state and local communities. SEWC urges the Commonwealth to take all these factors into consideration when developing the state’s energy roadmap for the next ten years. In addition, the state has taken many positive steps towards developing the wind industry through creating an offshore wind track in the state energy plan and hiring a consultant to develop a roadmap for the state to become an offshore wind manufacturing hub. While these steps move the state closer towards a generation mix that benefits both the grid and the economy, the Commonwealth must work to implement the appropriate recommendations that come out of these important processes in order to continue developing this fledgling industry in a meaningful way.