Virginia has approved the largest U.S. offshore wind array in spite of cost concerns. State utility regulators approved Dominion Energy’s 2.6 GW plan after a suspension last summer caused by “unfeasible” performance guarantees.
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The State Corporation Commission (SCC) approved Dominion Energy’s $9.8-billion-dollar Coastal Virginia Offshore Wind project. The objections came because forecasts predict problems with the state affording this utility upgrade: the new wind farm is “likely the costliest project being undertaken by any regulated utility in the U.S.”
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Is that an issue in a time when utilities are rapidly attempting to shift to cleaner renewables to stave off the worst effects of climate change? Not necessarily, but the project was approved despite regulators, also noting that the electricity the project will generate “will be among the most expensive sources of power.” This may change over time as renewables become more efficient and affordable, but it’s a challenge for a state without a lot of excess budget for updating the grid.
Why Virginia’s wind farm is so expensive
Dominion Energy described the new Coastal Virginia Offshore Wind array as “only the second offshore wind project in the nation and the first owned by an electric utility company.” The new wind farm will provide zero-carbon energy to as many as 660,000 customers at peak output.
The CVOW wind farm starts 27 miles off the coast of Virginia, which keeps it out of the view of coastal visitors and residents, while maximizing on the strong off-coast winds uninterrupted out in the Atlantic. The project will be constructed by 2026 and help avoid millions of tons of carbon dioxide emissions annually. Yes, annually. The reason the state approved the pricey project is that it helps the government achieve net-zero carbon and methane emissions by 2050.
Currently, just two wind turbines are in operation in U.S. federal waters, but even this small array avoids 25,000 tons of carbon dioxide emissions annually. The CVOW project aims to deliver clean, reliable and affordable energy and make a difference on climate change. It’s just the affordability part that takes time.
As of 2020, there were 3.184 million households in Virginia, which means that this project could replace up to 15% of the energy needed in the state for domestic use. That’s no small number for one utility project, indicating that replacing dirty coal and natural gas with just five more wind farms or a solar equivalent could put the state of Virginia on the road to completely renewable energy for the grid. That is expensive, but completely doable, especially as the cost of wind farms and the technology development comes down over time with more investment and progress.
Clean energy aims to create jobs
Dominion Energy says that the CVOW project will deliver up to 8.8 million megawatts per year of clean energy, which is the equivalent of planting more than 80 million trees. The utility company’s stated goal is to build a sustainable energy future with a plan to achieve net-zero carbon and methane emissions across 15 states serviced by 2050.
How will that work out for utility customers?
“By investing in sustainable energy, our company is creating new avenues for well-paying jobs,” Dominion added “An economic-impact analysis by the Hampton Roads Alliance estimates the seven-year impact of the project will amount to roughly $57 million in pay and benefits and $143 million in economic output, generating $5 million in state and local tax revenue.”
It comes down to energy prices to determine whether Virginia’s residents can afford the new wind farm, but in the context of climate change, it’s clear they can’t afford not to. The U.S. Department of Energy reports that the average cost of wind energy is coming down.
Domestic wind-related jobs grew to a record number in 2021, the DOE says, with more than 120,000 Americans now working in the wind industry. Driving the job growth is the 13,413 megawatts (MW) of new utility-scale wind capacity in 2021, largely attributed to a significant improvement in the cost and performance of wind power technologies, along with supportive federal and state-level policies. These additions bring the U.S. capacity to 135,886 MW, or enough energy to power 39 million American households per year, or nearly 30% of the current 131 million households Statistica says are in the U.S.
Wind turbines continue to increase in power. The DOE says that the average capacity of a new wind turbine is three MW, which is up 9% from 2020. Wind turbine prices averaged $800 to $950 per kW in 2021, which made the installed cost of an average wind project in 2021 about $1,500/kW, which is down more than 40% since 2010. This means energy can increasingly be produced at lower costs, bringing the average levelized cost of energy for utility-scale wind power down to $32/MWh in 2021.
Via Recharge News
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