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Dominion Virginia Power wins 112,800 Acres off of Virginia for Offshore Wind Development

RICHMOND – Governor Bob McDonnell issued the following statement this afternoon following news that the Bureau of Ocean Energy Management completed its live auction to lease an area off the coast of Virginia as the site of the nation’s second offshore wind energy lease sale. The winner of the lease sale is Dominion Virginia Power who bid $1.6 million for the lease.

Today, the Department of the Interior auctioned 112,800 acres offshore of the Commonwealth in a competitive lease sale as one single lease that is anticipated to support 2000 megawatts of wind generation and enough electricity to power 700,000 homes. The lease area, composed of 19 full Outer Continental Shelf (OCS) blocks and 13 sub-blocks and located 23.5 nautical miles from the Virginia Beach coastline, was selected after intensive work with the Commonwealth and stakeholders to avoid existing uses of the OCS offshore Virginia, including sensitive ecological habitat and shoals along the coast north of the mouth of the Chesapeake Bay, military training areas, marine vessel traffic, a dredge disposal site, and areas of concern specified by the National Aeronautics and Space Administration Goddard Space Flight Center’s Wallops Flight Facility.

“I want to congratulate Dominion Virginia Power on winning the lease for 112,800 acres of federal land off the coast of Virginia for offshore wind development. Dominion is one of the largest energy producers in the country and a great corporate partner in Virginia. I applaud the Department of the Interior and Secretary Sally Jewell for holding the second competitive lease sale for offshore wind on the U.S. Outer Continental Shelf. This again puts Virginia at the forefront of an ‘all-of-the-above’ energy development and security strategy to meet the needs of a growing America. I want to thank Interior Secretary Sally Jewell and her team at BOEM for moving this project forward as part of a comprehensive approach toward meeting our nation’s energy needs and creating more good jobs.”

“Earlier in our Administration we were pleased to accept the invitation of then-Secretary of the Interior Ken Salazar to join the Department’s Offshore Wind Consortium, and we worked with the Secretary on the ‘Smart from the Start’ program. Together with the General Assembly, we created the Virginia Offshore Wind Development Authority (VOWDA) to oversee the data gathering, research and planning that must be done to support offshore wind development off of Virginia’s coast. As part of that effort we are currently working toward final approval of two offshore wind research leases.

“Virginia’s coast is ideal for wind development. The gradual slope of the Outer Continental Shelf and consistent offshore wind speeds make this a natural geographic location for the commercial utilization of offshore wind resources. At the same time, Virginia enjoys a robust commercial ship building industry poised to become the center of construction for the component parts needed to build the specialized ships, turbines and towers necessary for these upcoming leases, and potentially for additional future wind leases on the east coast. This will result in millions of dollars in industrial activity and the creation of many new high-skilled jobs in our state.

“Today is another great step forward in ensuring Virginia is the ‘Energy Capital of the East Coast’ and in the development of offshore wind off the coast of the Commonwealth. We must utilize all of our energy resources, from wind to oil to gas to coal to nuclear, to create good jobs for our people and provide greater energy security for our country.”

The Department of the Interior release is available here.

The McDonnell Administration has taken numerous steps to position the Commonwealth as a national leader in offshore wind energy including:

  • Proposing successful legislation to create the new Clean Energy Manufacturing Incentive Grant (CEMIG) program to focus existing resources for energy development incentives on targeted nuclear, wind, solar and biomass alternative energy projects. The legislation expanded Virginia’s economic incentive programs for those companies willing to locate and innovate right here in the Commonwealth and will help make Virginia a hub for clean and renewable energy production.
  • Proposing successful legislation to create a Green Job Creation Tax Credit, an annual $500 tax credit for every green job created with a salary of $50,000 or more, for five years and up to 350 jobs.
  • Joining and supporting the work of former Interior Secretary Ken Salazar’s offshore wind consortium to reform the permitting process and develop leasing and permitting timelines that would support financing and actual project development; led to the Secretary’s “Smart from the Start” program.
  • Adopting a “first of its kind” in the nation Permit By Rule to streamline permitting of small (< 100 MW) land-based and offshore (state waters) renewable energy projects by addressing all issues of species and habitat, water quality and other state regulatory issues in a single permitting process agreed upon by all interested agencies and other stakeholders.
  • Creating the Virginia Offshore Wind Development Authority (VOWDA) which oversees the data gathering, research and planning that must be done to support offshore wind development off of Virginia’s coast and track issues as they arise, and makes recommendations for promoting Virginia offshore wind development.
  • Conducting several studies to quantify Virginia’s offshore resource, and the transmission resources needed and available to support development of that offshore resource.
  • Partnering with the BOEM to conduct a regional ocean geological survey, which will provide data about the ocean floor that will be made available to developers.
  • Filing applications with BOEM for research leases of federal waters so that Virginia can gather data and support new technology development and testing to lead to offshore wind development.
  • Requesting and receiving $500,000 from the General Assembly to support offshore wind development projects, allowing the Commonwealth to continue its efforts to develop data and additional information concerning the resource available in Virginia’s Wind Energy Area, and to make that data available to reduce the costs of development and assist developers in the federal leasing process.
  • Leveraging $300,000 of the appropriation noted above to obtain equal matching funds from the BOEM to engage a geological/geotechnical contractor to conduct surveys of the ocean floor to help determine what sorts of turbine foundations to use in the construction of a commercial wind generation project off the coast of Virginia.
  • Supporting a team led by Dominion Virginia Power in receiving a $4 million competitive grant from the US Department of Energy for research and technology development related to offshore wind turbine foundations. Additional partners include the National Renewable Energy Lab, Alstom, Huntington Ingalls-Newport News Shipyard and others. The project will make use of one of Virginia’s research leases.
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