Dominion receives lower bids for offshore wind research turbines

Published April 8, 2016 by Jessica Sabbath

Dominion Virginia Power said Thursday it has received bids in the range of $300 million to $380 million to install two offshore research wind turbines off the coast of Virginia Beach.

The utility launched a second round of bids after estimates to build the 12-megawatt project last year came in a range of $375 million to $400 million, more than double the expected cost.

Dominion is meeting in May with the Department of Energy (DOE), which would contribute $51 million to the project, known as the Virginia Offshore Wind Technology Advancement Project, or VOWTAP, just part of the overall money. “That is why getting the energy policy and the economics right for customers right is vital,” Mary Doswell, Virginia’s senior vice president for energy solutions, said Thursday on a conference call with the media and project stakeholders.

Project partners already have contributed $25 million to the project, with Dominion and the DOE providing the bulk of the costs.

Mark Mitchell, vice president of generation construction with Dominion, said Thursday he expects the VOWTAP bids to come in on the lower end of new cost estimates.

Following the higher-than-expected bid last year, Dominion decided to break the project into four separate bid packages to reduce costs. Those packages include: delivery and installation of the turbines; manufacture and installation of the the subsea cables; foundation fabrication and onshore connection facilities.

The most complex and costliest piece of project is the delivery and installation of the turbines. “There is a very limited number of contractors who are available to do this work,” says Mitchell.

Few companies worldwide have ships large enough to install offshore wind turbines. The project would require the ship to travel from Europe and miss the busy season of wind energy installation in Europe.

The company plans to have a project update by July. Dominion would then apply for regulatory approval from the State Corporation Commission.

Under the project’s current schedule, the project would be completed by mid-2018.

In March, the U.S. Bureau of Ocean Energy Management approved the design and implementation plan for VOWTAP. It became the first wind energy project to receive that approval.

VOWTAP would be used to provide research on developing offshore wind economically. The turbines would be located next to Dominion’s commercial lease area for offshore wind development. That project is on schedule for development beginning between 2020 and 2025.