Dominion Virginia Power wins second competitive offshore wind lease auction

Dominion Virginia Power has won the bid in a federal auction to lease 112,800 acres of land on the outer continental shelf off of Virginia to construct a 2,000MW offshore wind power plant, which is expected to generate enough energy to power more than 700,000 homes.

The company's $1.6m bid apparently topped Apex Virginia Offshore Wind's bid in the auction, which was conducted by the US Department of Interior's Bureau of Ocean Energy Management (BOEM) on 4 September 2013.

BOEM set the opening bid at $225,598, or $2 an acre in the auction, which lasted for six rounds on a single day. It auctioned the target offshore wind energy area, approximately 23.5 nautical miles off Virginia Beach, as a single lease that includes 19 whole outer continental shelf blocks and 13 sub-blocks.

Dominion Alternative Energy Solutions senior vice-president Mary C. Doswell said that offshore wind resources can provide scalable renewable resource for Virginia if it is achieved at reasonable cost.

"We will now proceed with the BOEM timetable for development of the commercial wind energy area while advancing our research proposal and looking for ways to lower the cost of bringing offshore wind generation to customers," Doswell said.

Dominion is now required to submit relevant plans within five years of signing the lease that include submitting a site assessment plan within six months and then filing a construction and operations plan within four and a half years. Subsequently, BOEM will carry out environmental analysis and approve the plan.

The company expects to have the first turbine installed in around ten years should it secure all the necessary approvals from the state regulators.

Besides Dominion and Apex, six other companies including Energy Management, EDF Renewable Development, Fisherman's Energy, Iberdrola Renewables, Sea Breeze Energy and Orisol Energy were approved to bid in the auction.

The Virginia auction is the country's second competitive offshore wind lease sale with first being the July 31 auction of 164,750 acres offshore of Rhode Island and Massachusetts that was won by Deepwater Wind New England.