Offshore wind energy lease process moves forward

The federal government has cleared an environmental hurdle in allowing wind energy lease sales off the Virginia coast.

The Bureau of Ocean Energy Management has sent out a call for information to identify industry interest in locations in the offshore Virginia Wind Energy Area for commercial leases, the U.S. Department of the Interior announced Thursday.

Dominion Virginia Power is planning to respond to the federal government's call for interest in building offshore electricity-generating wind.

"Offshore wind generation holds great promise in the long term as a renewable source of electricity," the Richmond-based company said in a statement, "if it can be achieved at reasonable cost to customers."

A wide span of business and political interests hailed the federal move clearing the way for industrial wind turbines on the blue waters.

"Cost-effective development of Virginia's offshore wind resources is one important component of our overall effort to make Virginia 'The Energy Capital of the East Coast,' " said Republic Gov. Bob McDonnell.

And his Democratic predecessor, Timothy M. Kaine, said, "I am thrilled to hear Virginia can move forward in developing wind energy infrastructure off our coast."

Chesapeake Climate Action Network Director Mike Tidwell said, "News today that offshore wind lease areas in coastal Virginia can be developed in ways safe for the environment — and that federal officials are stepping up leasing procedures — is only further indication that Virginia should move swiftly to develop its vast offshore wind power resource."

The federal ocean energy agency said its environmental assessment found no significant environmental and socioeconomic impacts would spring from issuing wind energy leases in outer continental shelf areas off Virginia, Maryland, Delaware and New Jersey.

The Bureau of Ocean Energy Management identified nearly 113,000 acres about 24 miles off the coast of Virginia that could be developed for electricity-generating wind turbines. It asked potential developers to respond within 45 days with their interests.

Thursday's announcement by the bureau is intended to test industry interest in developing the 9-square mile blocks, or parcels. The area is made up of 19 whole blocks and 13 sub-blocks.

"There are a number of developers who are very interested in developing offshore wind here, and our goal is to hold the auctions and be able to issue the leases now, in 2012," U.S. Secretary of the Interior Ken Salazar said. "So, this is not something that's going to be waiting around."

Dominion Virginia Power, the state's largest electric utility, intends to be a player in Virginia offshore wind energy market. But "this is a long-term project," said Mary C. Doswell, the company's senior vice president for alternative energy solutions.

"The United States currently lacks offshore wind infrastructure without dedicated ships or supply chain today," Doswell said. "The challenge remains the high cost of building this generation and bringing it to customers."

Electricity from sea-based wind costs about 28 cents a kilowatt-hour to produce, the company said, while its all-inclusive rate for residential customers is 11 to 12 cents a kilowatt-hour.

Federal tax credits for the development of offshore power are due to expire this year, which Doswell said is a "big deal" because of the expense of developing offshore winds.

Virginia's largest utility has a $500,000 Department of Energy Grant to study ways to bring down the costs of offshore wind development, including turbine designs and other new technologies.

Clean-energy advocates have promoted the natural power off Virginia because of strong winds and shallow waters in the areas the government has designated for development. The state's shipbuilding and port industries, they say, could handle the design, manufacture and shipping of the turbines.

Besides Dominion Virginia Power, at least two other companies have shown interest in developing wind farms off Virginia: Apex Offshore Wind, based in Charlottesville, and Seawind Renewable Energy Corp.