Companies signal interest in offshore Va. winds

RICHMOND, Va. (AP) -- An energy company developing the nation's first offshore wind project is among the growing number of companies expressing interest in the federally designated wind-development area 27 miles off Virginia's coast.

Energy Management Inc., developer of the Cape Wind project in federal waters off Massachusetts' Cape Cod, and Sea Breeze Power Corp. alerted the federal Bureau of Ocean Energy Management that they might join the bidding later this year to develop wind energy in the 133-square-mile area off Virginia Beach. They join Dominion Virginia Power and seven other energy companies that have already expressed interest.

EMI confirmed it has submitted materials to qualify for participation in the coming auction, "should we choose to do so," a company spokesman said. Sea Breeze, a western Canada company, did not respond to requests for comment.

The development area was carved out of the Atlantic after extended negotiations involving the Navy, Coast Guard and port officials, among others. This section of the coast is one of the busiest on the eastern seaboard. BOEM said the interest by energy companies is gratifying.

"When you finally put forth a proposal for a wind-energy area and you receive this level of interest, then that does confirm that we're offering an area that has commercial interest," said Maureen Bornholdt, BOEM's program manager for renewable programs. "That's a good thing."

Gov. Bob McDonnell's top energy adviser, Maureen Matsen, welcomed the industry interest as well. She said Wednesday it "only confirms the unique value of the wind resource off our coast and the strong support attributes Virginia offers onshore."

Advocates of offshore wind power agree that the relatively shallow waters off Virginia are optimal for development and its port and shipbuilding industry offer an ideal platform to build and launch the towering turbines and blades that convert wind to energy.

"First of all it's a win for the wind industry because they're going to have the trained labor force in place and the ability to use the services of the port," said Jacqueline Savitz, deputy vice president of U.S. campaigns for Oceana, an environmental group. "And it's a win for the commonwealth because it's going to create jobs and it's a win for the environment and clean energy."

Studies have estimated that the development of a wind industry on the outer continental shelf would create in the range of 10,000 jobs in Virginia. The U.S. has virtually no manufacturing base for the big components needed to withstand the ocean environment because much of the industry has been developed elsewhere such as in northern Europe and China.

The creation of an offshore wind industry has been moving forward at a glacial pace in the U.S., but the Interior Department's BOEM has moved to hasten the process and Virginia has also attempted to smooth the way. The state Department of Mines, Minerals and Energy, for example, is partnering with BOEM on an ocean bottom survey to map and measure wind speeds and direction, water depths and bird and bat activity. Birds and bats can often die in large numbers from flying into the rotating blades of wind turbines that can rise hundreds of feet above the ocean surface.

The ocean survey is intended to spare developers the preliminary steps needed to create wind farms in offshore tracts. Companies already face daunting costs to develop wind energy.

Richmond-based Dominion has expressed its interest in developing the entire lease area, which it has said has the potential of generating 1,500 to 2,000 megawatts of electricity, enough energy to power 500,000 households. Apex Offshore Wind, based in Charlottesville, is another Virginia company that has expressed interest.

Dominion has said it's interested in building up to 400 wind turbines in Atlantic waters, but cautioned that keeping costs down will be the challenge.

The U.S. Energy Information Administration projects the cost of offshore wind generation in 2016 at about 24 cents per kilowatt-hour generated. Dominion said that's a significantly higher than what its residential customers currently pay for electricity.

Oceana has objected in a filing with BOEM to one company claiming the entire leasing area, which is allowed under federal guidelines.

"Then you get one big energy company that has a lot of money — like Dominion, for example — and they can buy the lease and if they decide not to develop it right away all these other companies are sitting with their arms crossed, waiting," Savitz said. By allowing more than one company to lease in the area, "you don't have all your eggs in one basket."

Bornholdt said BOEM has leasing regulations that would prevent energy companies from "banking" lease areas — acquiring leases but not developing them. A company, however, still has up to five years to provide a construction and operation plan.

The other companies that have expressed interest in the lease area are Arcadia Offshore Virginia, Cirrus Wind Energy Inc., enXco Development Corp., Fishermen's Energy, Iberdrola Renewables and Orisol Energy US Inc.

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Steve Szkotak can be reached on Twitter at http://twitter.com/sszkotakap .