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United States: Could Virginia's New Energy Laws Undermine Its Wind Power Plans?

Published at: Apr 19, 2012
source: North American Wind Power

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The state of Virginia has recently signed into law several bills that will broaden the energy sources allowed under the states' goal of 15% renewable energy by 2025. These now include landfill gas and thermal energy equivalents. These additions require lower investment and should accelerate market growth. They could make development of wind energy more difficult though.

Virginia Gov. Bob McDonnell recently signed into law several bills that amend the state's energy strategy to conform to what the governor says is an "all-of-the-above" approach. Although McDonnell says the new laws support the expansion of "alternative" energy resources, that doesn't necessarily mean they favor wind power, specifically.

Among the new laws is legislation that allows research and development (R&D) activities to count toward the state's goal of attaining 15% renewable energy by 2025. Investor-owned utilities participating in the program would show evidence of their expenses in Virginia-based R&D in alternative or renewable energy technologies, which are now allowed to qualify for up to 20% of the state's renewable energy goal.

In addition, a separate new law expands the definition of "renewable energy" to clarify that biomass includes landfill gas and thermal energy equivalents (i.e., output from renewable-fueled combined heat and power generation facilities). Previously, only wind, solar, geothermal, hydropower, wave, tidal, and [unspecified types of] biomass energy qualified as renewable resources.

Considering Virginia does not have a mandatory renewable portfolio standard, allowing other - and perhaps less costly - sources and means for utilities to qualify for the goal doesn't provide much incentive for wind power development. According to statistics from the American Wind Energy Association (AWEA), Virginia does not have any wind power projects in operation, although it does have 38 MW under construction.

However, Virginia's real wind power potential lies in its vast offshore resources, which AWEA says amount to a whopping 94.448 GW (at 90 meters). Earlier this year, McDonnell expressed his support for offshore wind by setting aside $500,000 in funding for offshore wind R&D.

Such R&D efforts are already under way. Last month, the Virginia Marine Resources Commission gave Spanish wind energy company Gamesa the go-ahead to construct a 5 MW offshore wind turbine prototype in the Chesapeake Bay. The demonstration project also includes the construction of a steel monopile foundation and tower, as well as the installation of submerged power cable buried below the seabed.

Another undersea transmission line - the Google-backed Atlantic Wind Connection - would connect up to 7 GW of offshore wind power to the utility grid. The project gained federal approval from the U.S. Department of the Interior (DOI) late last year, but another company - utility Dominion Virginia Power - is vying for the area.

Dominion - which received a $500,000 grant from the U.S. Department of Energy to study ways to reduce the cost of offshore wind power - has expressed interest in the entire 113,000 acres the government is making available approximately 24 miles off the Virginia coast.

Now that other, potentially cheaper resources are eligible to count toward Virginia's renewable energy target, will the utility still pursue costly offshore wind power projects?

Dominion spokesperson Jim Norvelle tells NAW that wind power is just one part of its energy strategy, and that yes, the company is continuing its plans for offshore wind energy development of Virginia's coast.

"While we don't see the new legislation affecting our energy strategy, we welcome more renewable energy possibilities into the ‘all the above' energy mix that is the stated goal of both by Gov. McDonnell and President Obama," he says. "We replied to the Bureau of Ocean Energy Management's call for information about the leased areas off the coast of Virginia, and we are leading an effort to find ways to lower the cost of offshore wind generation."

Despite the push for an all-of-the-above energy approach, early industry reaction to Virginia's new energy laws has been positive.

"The energy legislation signed by Gov. McDonnell strengthens, adds flexibility, and supports the expansion of alternative energy resources in Virginia," says Jeff Keever, chairman of the Virginia Offshore Wind Coalition. "The Virginia Offshore Wind Coalition is supportive of Gov. McDonnell's legislative energy package and is looking forward to Virginia becoming the energy capital of the East Coast."

In fact, there could still be some extra incentive for utilities to purchase wind power after all. Under the state's renewable energy goal program, onshore wind receives a double credit toward the target, and offshore wind receives a triple credit.

Nonetheless, any offshore wind power development off of Virginia's coast is still years away. The DOI's Bureau of Ocean Energy Management has not yet awarded any offshore wind leases in the area, although the agency did find that developing off the Mid-Atlantic coast would have no significant environmental or socioeconomic impacts on the region.

Developers will still be required to complete a comprehensive, project-specific environmental impact statement for any wind farm in federal waters before they are given final approval to begin construction.


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