Horizon Offshore

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					Offshore Wind: Potential Energy and
    Economic Benefits to Virginia

       VCERC Day at the General Assembly

                  Richmond, VA
                04 February 2009

                         George Hagerman
                         VCERC Director of Research
                         Virginia Tech Advanced Research Institute
                         4300 Wilson Blvd., Suite 750
                         Arlington, VA 22203

                         Phone: 703-387-6030
               Presentation Outline

Virginia Coastal Energy Research Consortium
   • History, funding, and projects

Offshore wind resources
   • Located near coastal metropolitan load centers
   • Mid-Atlantic has most abundant shallow water resource

Offshore wind technology
Mapping offshore winds and other ocean uses to
  estimate Virginia’s realistic near-term potential
Comparing cost of energy between offshore wind
  and fossil fuel fired power plants
Economic development potential
VCERC Created by 2006 General Assembly to Bring
Together Universities, State Agencies, and Industry

Virginia Coastal Energy Research Consortium           Non-University VCERC Directors
                 Mechanical, electrical, materials,
                    civil, and ocean engineering                       Integration of marine
                                                                       renewables into
                  Washington, DC area presence                         Virginia Energy Plan

                               Physical, chemical,
                               & geological ocean                  Ensuring compatibility
                               sciences                            with other marine uses
                                                                   and coastal resources
                               Biological ocean
                                                             Identification of manufacturing
                                                             job creation opportunities and
                   Wind energy engineering                   industry benefits of long-term,
                                                             price-stable energy supply
                   Renewable energy
                   curriculum development

                   High-tech workforce training                 Identification of waterfront
                                                                development opportunities
                   Entrepreneurship development
      Three Additional Universities and
Two New Industry Representatives Added in 2007

Virginia Coastal Energy Research Consortium                  Non-University VCERC Directors
             Rice Center for Environmental
                Life Sciences expertise on
                      natural algal blooms

                          Integration of GIS
                   tool into Coastal GEMS                    Interface with local high-tech industry,
                                                             including advanced manufacturing,
                                                             sensors, and control systems
                 Virginia Coast Reserve Long-Term
                 Ecological Research Project

                 Chemical Engineering Department
                 -- fuels testing and characterization

                 Research and development                Virginia Clean Cities and the Hampton
                 of alternative marine                   Roads Clean Cities Coalition identify regional
                 biofuels and bioproducts                transportation needs and opportunities for
                                                         fuels from algae and integration of offshore
                                                         wind with plug-in hybrid electric vehicles
FY 2007- 08 VCERC Budget Distribution

   Project        VT-ARI           ODU             ODU              JMU            NSU          VIMS          Total
                                                (Industry) *
       1         $200K          $150K           $50K             $15K            $0K            $0K*        $425K
       2         $30K           $64K            $0K              $120K           $0K            $50K        $244K
       3         $20K           $0K             $100K            $15K            $75K           $0K         $195K
       4         $0K            $511K           $0K              $0K             $0K            $100K       $636K
    Total        $250K          $725K           $150K            $150K           $75K           $150K       $1,500K
   * VIMS anticipates being able to support Project 1 through its normal Sea Grant activities and with a subset of the
   GIS data produced under Project 2.

  In Oct 2007, higher-education budget cut of 10.6% to VCERC budget
  amendment was applied uniformly across all projects and universities
  * SAIC Maritime Operations is ODU Industry Partner
 Three Initial VCERC Projects
   Focus on Offshore Wind
                       1. Feasibility-level design and
                           economic assessment
                           for a hypothetical reference baseline
                           offshore wind power project
                       2. Preliminary mapping of offshore
                           suitable for offshore wind power
                           development, with identification
                           of military training areas, shipping
                           lanes, commercial fishing grounds,
                           and marine and avian habitats
                       3. Evaluation of economic
                           development potential
                           of commercial offshore wind power
                           development and associated
Paliria Energy, Inc.       workforce training needs, and
                           planning for an ocean test bed
                       4. Feasibility-level design and
                           economic assessment
                           for an algae-to-biodiesel culture
                           and processing system
                 U.S. Offshore Wind Resources
 Pacific NW                                                    Gulf of Maine
Class 5, 6 & 7                                                   Class 6

                                             Great Lakes
                                             Class 5 & 6

                                                                Class 5 & 6

 S California
Class 4, 5 & 6
                                                           Class 4, 5 & 6
                            Great Plains
                            Class 3, 4 & 5
Nearly 80% of U.S. Electricity Demand is in Atlantic,
   Pacific, Gulf of Mexico or Great Lakes States

Twenty-eight coastal states in contiguous U.S. consume 78% of U.S. electrical energy
Nearly 60% of U.S. Population Lives in Atlantic,
 Pacific, Gulf of Mexico or Great Lakes States

Twenty-eight coastal states in contiguous U.S. are home to 58% of population
 US Offshore Wind Resources Located
Near Coastal Metropolitan Load Centers
Virginia is One of Ten States with Shallow-Water
     Resource Base Comparable to Demand


                               MI                        RI
                                    OH             DE



  Mid-Atlantic Offshore Wind Energy Can Meet
  a Large Portion of the Energy Needs in PJM

                                                                                  20% =
                                                                                 33.1 GW

Developing just 20% of the Mid-Atlantic region’s offshore wind potential in
depths < 30 m (as required for economical monopile-based projects using commercially
available technology) would result in 33.1 GW of installed offshore wind capacity.
  PJM Energizes About One-Fifth
of the U.S. Gross Domestic Product

                                    33.1 GW of
                                  offshore wind
                                  at 40% annual
                                  capacity factor
                                 would generate
                                  116,000 GWh,
                                 supplying about
                                   17% of PJM’s
                                  annual energy
     Offshore Wind Might Relieve PJM
Transmission Constraints from West to East

                                     Fentress is the
                                     only high-voltage
                                     substation near
                                     the Atlantic coast
                                     for gigawatt-scale
                                     projects between
                                     Staten Island, NY
                                     and Savannah, GA
    Hampton Roads Area has Unique Features
 Favorable for Offshore Wind Power Development

                                                       Robust coastal
Class 6 ( ) wind                                     transmission grid
energy resource                             115 kV                         Minimal probability of
located within                                                             major hurricane strike
10-15 miles                                                              (Categories 3 through 5)
(16-24 km) of
shoreline and
close to major,
growing centers
of power demand                 500 kV
                                            230 kV

                         Pale blue region
                      indicates uncertain
                      wind map accuracy
                   beyond 25 km offshore
Typical Offshore Wind Farm Layout
Monopile Foundations Driven into Seabed
 and Transition Pieces Grouted on Top
           Horns Rev 2-MW Turbines
Installed Using Self-Propelled A2 SEA Vessels
         North Hoyle 2-MW Turbines
Installed Using Towed Seacore Jack-Up Rigs
    GIS Analysis and Mapping of Resource
Focus on 50 MMS lease blocks and avoid all excluded areas   MMS lease blocks are
                                                            4.8 km x 4.8 km, with each
                                                            block having 7 x 7 turbines.
                                                            Turbines spaced 685 m
                                                            apart (7.6 rotor diameters)
                                                            Each lease block could
                                                            contain 49 turbines
                                                            = 147 MW per block with
                                                              Vestas model V-90 3 MW
                                                            = 6.4 MW per km2

                                                                 GIS layers and
                                                                 calculations by
                                                                 James Madison
                      Class 6 Winds are
              Largely Beyond the Visual Horizon

                                                                   Beyond the
Photo simulation of Long Island offshore wind project              Territorial Sea
                                                                   Limit of 12 n.mi.,
                                                                   turbines would
                                                                   be barely visible,
                                                                   and then only on
                                                                   the clearest days.

                                                                   Total available
                                                                   area of Class 6
                                                                   beyond 12 n.mi.
                                                                   is 575.6
                                                                   (142,500 acres);
                                                                   could support
                                                        12 n.mi.   3,680 MW of
                                                                   wind capacity.
  Class 6 Winds Beyond the Visual Horizon
Could Be a Major Electricity Source for Virginia

                                          Total available
                                          area of Class 6
                                          beyond 12 n.mi.
                                          is 575.6
                                          (142,500 acres);
                                          could support
                                          3,680 MW of
                                          wind capacity.

                                          With an average
                                          annual capacity
                                          factor of 40%, this
                                          amount of wind
                                          generation capacity
                                          could generate
                                          12.9 million MWh
                                          per year.

                                          This is about 1/3
                                          of what coal-fired
                                          power plants now
                                          generate in VA, or
                                          slightly more than half
                               12 n.mi.   of what nuclear plants
                                          now produce.
   Early, Meaningful Engagement of
Local Stakeholders Essential to Success
   Cost of Energy Comparison
with Fossil Fuel Fired Generation
              Cost of Energy Comparison
           with Fossil Fuel Fired Generation

Fossil fuel generation costs and performance are based on actual or planned generation
projects under development by Dominion Virginia Power: a combined-cycle natural gas
fired plant in Buckingham County, and a coal-fired plant in Wise County.
         Offshore Wind Provides a
Long-Term Hedge Against Fuel Price Volatility
              Economic Development Potential

     Capital cost breakdown for hypothetical offshore wind project
                                  Based on Vestas
                                  V90-3MW turbine

                                                                            30% of capital cost
                                                                               engages local
                                                                             economy to build
                                                                              balance of plant

Estimated maritime industry value of fabrication, installation, and service
contracts for notional 3,600 MW of installed offshore wind capacity:
  • At $3,600 per installed kW, total capital investment (CI) = $12.96 billion
  • Assuming an installation rate of 180 MW per year= $648 million per year over 20 years
  • Local fabrication and installation contracts = $194 million per year until fully built out
  • Local offshore service contracts (2.5% of CI) = $155 million per year after fully built out
  • With 25-year project service life, project re-powering ensures indefinite sustainability
     Hampton Roads can Become a Hub for
Offshore Wind Supply and Support Infrastructure

                                       (Cape Wind)
                                      Rhode Island
  Supply chain                    New Jersey
  and maritime
  needed for all
  Atlantic coast
  projects is a
 Interstate Coordinated Planning Needed to
Avoid Local Economic Boom and Bust Cycles
  Thank You!

   Any questions?

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