US gov't withdraws $40-MM windpower grant
RICHMOND - Dominion Virginia Power is assessing options for its proposed offshore wind demonstration project in light of an announcement today that the US Department of Energy (DOE) is withdrawing $40 MM in funding.
"Naturally, we are disappointed in the DOE's decision because we still believe that offshore wind has a great potential to deliver clean, renewable energy to Virginia," said Mary C. Doswell, senior vice president of Dominion Energy Solutions. "However, we also recognize the unique regulatory and cost challenges involved in our project and appreciate the DOE's desire to support other projects that may have an earlier opportunity for fruition."
Doswell said Dominion plans to consult with other members of the project team, known as the Virginia Offshore Wind Technology Advancement Project (VOWTAP), as well as participants in a stakeholder group of government, research and community representatives, before deciding on next steps.
The VOWTAP project would install two advanced-technology, 6-MW wind turbines in federal waters about 24 mi off the coast of Virginia Beach.
At peak production, the turbines would generate enough electricity to power up to 3,000 homes. Current bids for constructing the project range from about $300 MM to $380 MM, compared with an initial estimate of about $230 MM.
Doswell said the DOE made its decision after Dominion could not guarantee an in-service date for the project earlier than 2020. While the company has been working toward an earlier date, there are too many uncertainties to meet DOE's request.
These uncertainties include the high cost of the project, the inability to obtain firm construction contracts, and the increasing complexities of gaining regulatory approval for energy infrastructure projects.
VOWTAP was one of three offshore wind projects chosen by the DOE in May 2014 to receive a second round of funding.
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