Dominion, DONG Partner On Offshore Wind
Through a new agreement and strategic partnership with DONG Energy, Dominion Energy Virginia is moving forward on an offshore wind project in a federal lease area off the coast of Virginia Beach, Va. Dominion has signed a deal with DONG Energy to build two 6 MW turbines for the newly named Coastal Virginia Offshore Wind project, of which Dominion Energy remains the sole owner.
DONG Energy expects to immediately begin engineering and development work in order to support the targeted installation by the end of 2020. The timing for construction depends on many factors, such as weather and protected species migration patterns, notes Dominion.
This phase-one development will be built approximately 27 miles off the coast of Virginia Beach on a 2,135-acre site leased by the Virginia Department of Mines, Minerals and Energy. Dominion says it will provide critical operational, weather and environmental experience needed for large-scale development in the adjacent 112,800-acre site leased by Dominion Energy from the Bureau of Ocean Energy Management (BOEM). Full deployment could generate up to 2 GW of energy – enough to power half a million homes.
The two companies have signed a memorandum of understanding giving DONG Energy exclusive rights to discuss a strategic partnership with Dominion Energy about developing the commercial site (based on the successful deployment of the initial test turbines). DONG Energy, which is based in Denmark and has North American headquarters in Boston, owns 22 offshore wind farms in Europe and Asia.
The project continues what previously was called the Virginia Offshore Wind Technology Assessment Project. Dominion Energy began work on the project in 2011 as part of a U.S. Department of Energy grant to develop and test new wind technologies that could lower costs and withstand hurricanes. During that time, key achievements were made to advance the project, including the Approval of the Research Activities Plan by BOEM and environmental studies, which included avian and bat surveys, as well as assessments of ocean currents, archeological conditions and whale migration patterns.
“Virginia is now positioned to be a leader in developing more renewable energy, thanks to the commonwealth’s committed leadership and DONG’s unrivaled expertise in building offshore wind farms,” comments Thomas F. Farrell II, Dominion Energy’s chairman, president and CEO. “While we have faced many technological challenges and even more doubters as we advanced this project, we have been steadfast in our commitment to our customers and the communities we serve.”
According to the energy company, the project would be only the second offshore wind project in the nation and the first owned by an electric utility company.
“Today marks the first step in what I expect to be the deployment of hundreds of wind turbines off Virginia’s coast that will further diversify our energy production portfolio, create thousands of jobs and reduce carbon emissions in the commonwealth,” says Gov. Terry McAuliffe, D-Va. “Hampton Roads has the ideal port assets and talented workforce to attract and house the offshore wind business supply chain to support not only Virginia’s commercial wind area, but also wind farms under development in Massachusetts, New York and Maryland. Today’s announcement advances our efforts to build a new Virginia economy that is cleaner, stronger and more diverse.”
Rocky Mountain Power Advances Major Wind, Transmission Plans
Salt Lake City-based Rocky Mountain Power is asking regulators in three states to approve an initial plan to significantly expand the amount of wind power serving its customers by 2020.
Regulatory filings in Wyoming, Utah and Idaho seek to advance the company’s Energy Vision 2020 initiative. The plan would do as follows:
Upgrade or repower the company’s existing wind fleet with longer blades and newer technology;
Add approximately 1.1 GW of new wind; and
Build a new 140-mile Gateway West transmission segment.
Most of the new investments would be in Wyoming, notes Rocky Mountain Power, which is a division of PacifiCorp and part of Berkshire Hathaway Energy.
“We are very excited to begin the stakeholder review process for these projects that will significantly increase the renewable energy that serves all our customers,” comments Cindy A. Crane, Rocky Mountain Power’s president and CEO. “These investments will provide significant long-term benefits to our customers and bring substantial economic benefits to rural communities where the facilities will be located.”
The company first announced the wind and transmission investments in April as part of its broader long-term energy plan. Additional filings and regulatory approvals will be needed for the projects to be built and serve customers by 2020 as planned, the company says.
The Energy Vision 2020 projects were chosen by Rocky Mountain Power as the most cost-effective option to meet customers’ energy needs over the next 20 years. By moving to complete the projects by 2020, the company says it will be able to use federal production tax credits to provide a net cost-savings to customers over the life of the projects.
Further, Rocky Mountain Power also expects the projects to do as follows:
Create 1,100-1,600 construction jobs in Wyoming;
Add approximately $120 million in tax revenue from construction; and
Bring significant post-construction annual tax revenues, starting at approximately $11 million in 2021 and growing to $14 million annually by 2024.
Cheers: Beer Maker Brews Up Renewables
After making a commitment to secure 100% of its purchased electricity from renewables by 2025, the world’s largest beer company is now in the process of bringing 220 MW of wind capacity to Mexico.
Anheuser-Busch (AB) InBev, which produces hundreds of brands of beer, including Budweiser, Corona, Stella Artois and Beck’s, signed a 15-year power purchase agreement (PPA) with Iberdrola for 490 GWh of wind power each year – providing enough energy to fully power all of its production sites in Mexico, including its largest brewery in Zacatecas.
As part of the agreement, which was signed on March 28 in Mexico, Iberdrola agreed to build and install 220 MW of wind energy capacity onshore in the state of Puebla.
Tony Milikin, chief procurement and sustainability officer at AB InBev, says the new wind project is called PIER (Parque Industrial de Energia Renovable), noting it’s an extension of an existing PIER wind farm owned by Iberdrola. Gamesa has been contracted to manufacture the turbines, with delivery expected in early 2018.
The beverage company expects the wind facility to begin producing energy in the first half of 2019, and according to Iberdrola Mexico’s spokesperson, construction has already begun.
With this first agreement, AB InBev is following through on its commitment to 100% renewables, noting both economic and environmental benefits.
“On the business side, renewable electricity through PPAs is actually cheaper than grid-sourced electricity in several markets,” Milikin says. “And further, PPAs help us reduce our risk from volatility in energy prices by locking in a fixed price of electricity in each agreement.
“But this decision was about more than that. As a company, we believe that climate change has profound implications for our business and for the communities where we live and work, and it’s a huge area of concern for our consumers.
“I have said before that my generation – the baby boomers – see resources as infinite,” he continues. “As a generation, we seem to think that there will always be clean water or new sources of coal or gas. But the people coming up behind us, and especially the millennials, get that this isn’t the case. They know that these resources are finite, and we need to protect them and find new, cleaner and more renewable sources of electricity.”
This 100% goal is a noteworthy shift, considering AB InBev currently sources only about 7% of its purchased electricity from renewables. The company expects that by 2025, between 75% and 85% of its electricity will be secured through direct PPAs, like the one signed with Iberdrola, while the remaining 15% to 25% will come from on-site technologies.
And considering the company’s global operations require a whopping 6 TWh of electricity each year, AB InBev claims this plan – once enacted – will make it the largest direct corporate purchaser of renewable electricity in the consumer goods industry.
In conjunction with its renewable pledge, the company also announced that it officially joined the ranks of RE100, led by The Climate Group, along with CDP.
Launched in 2014, RE100 is a collaborative group of businesses that have committed 100% to renewable electricity and actively work to increase the adoption of renewables. These businesses include some of the biggest names in the game, including Apple, Bank of America, Coca-Cola, Ebay, Google, General Motors, IKEA, Johnson & Johnson, Microsoft, Nestle, P&G, Starbucks, TD Bank, Tesco, Walmart, Wells Fargo, and many more.
Acknowledging the rising demand for renewables from corporate customers, Milikin adds, “Businesses must start planning for a future that doesn’t totally depend on those [traditional] sources. Renewable electricity sources – like solar and, of course, wind power – are where the leading companies are heading.”
AB InBev says it chose to launch its efforts in Mexico because it already had a trusted partner in the area – Iberdrola – and because the country could serve as a case study for other developing emerging markets.
“When it came to building the contract, [Iberdrola] came to the table with a strong business point of view, and they were flexible in discussing the terms and conditions,” Milikin says. “In the end, they were the best choice for this agreement.”
The PPA will add more than 5% in additional renewable energy capacity to the current installed wind capacity in Mexico, based on existing, estimated 2015 installed wind and solar capacity from the International Renewable Energy Agency, helping the country reach its renewable generation target of 35% by 2024.
Emphasizing that the PIER project is only its first endeavor, AB InBev says it’s currently working to secure similar agreements in other markets, including Argentina, Brazil, India and South Africa.
“By using Mexico as our launch platform, we want to show that these kinds of PPAs are workable in developing countries,” Milikin says. “We want to send a signal to businesses that switching directly to renewable electricity can create positive social and environmental benefits while also delivering local cost savings.”
AB InBev hopes to be able to announce additional projects in the coming months and, more long term, over the next few years.
“I think we have an obligation to leave this Earth better than we found it,” Milikin says. “And with this commitment, we are doing what we can to make that happen.” – Lauren Tyler
Regulators Green-Light Xcel’s Wind Expansion
The Minnesota Public Utilities Commission (PUC) approved Xcel Energy’s plan for a huge wind energy expansion in the Upper Midwest.
Seven new wind farms are slated to be built in Iowa, Minnesota, North Dakota and South Dakota and will be operational by the end of 2020. The projects will provide enough energy to power more than 800,000 homes and increase Xcel Energy’s regional wind output by approximately 70%. The North Dakota Public Service Commission will review the plan later this year.
“We’re investing in low-cost wind energy to provide the benefits of clean, affordable energy directly to our customers,” says Chris Clark, president of Xcel Energy-Minnesota. “These projects deliver on our plan to keep energy costs low while also reducing carbon emissions by more than 60 percent in the coming decades.”
The facilities are as follows:
Freeborn Wind Energy, a 200 MW project in Freeborn County, Minn., and Worth and Mitchell counties, Iowa;
Foxtail Wind, a 150 MW project in Dickey County, N.D.;
Blazing Star 1, a 200 MW project in Lincoln County, Minn.;
Blazing Star 2, a 200 MW project in Lincoln County, Minn.;
Crowned Ridge Wind Project, a 600 MW project in Codington County, S.D.;
Lake Benton Wind Project, a 100 MW project in Pipestone County, Minn.; and
Clean Energy 1, a 100 MW project in Morton and Mercer counties, N.D.
All projects are expected to be completed by the end of 2020, thus qualifying them for production tax credits, notes Xcel Energy.
The company says local landowners and governments will receive millions in lease payments and property taxes over the life of the projects. In addition, up to 1,500 construction jobs are expected to be created.
Xcel Energy will own 1,150 MW of the new wind energy; the remaining 400 MW will be sold to the company under long-term power purchase agreements.
“We are pleased to see the Minnesota Public Utilities Commission give Xcel Energy the green light on their proposed acquisition of over 1,500 MW of clean, cost-effective wind energy,” says Beth Soholt, executive director of Wind on the Wires, a nonprofit that advocates for renewable energy in the Midwest. “[The] unanimous vote by the PUC demonstrates not only that wind energy is a smart investment for ratepayers, but also that these projects will provide significant economic benefits throughout our region.”
County Banks Millions From Production Taxes
Representatives from the wind industry and Xcel Energy recently presented a ceremonial check to Tim Gabrielson, chairman of the Mower County, Minn., board of commissioners, for $2,373,932 in wind energy production tax revenue for 2016. According to Wind on the Wires, the check represents the largest wind energy production tax payment made to any one county in Minnesota. Moreover, it’s a 26.5% increase over last year’s payment.
Statewide, revenue from the wind energy production tax exceeds $12 million, and more than one-quarter of the counties in the state benefit from this source of revenue, says Wind on the Wires, a St. Paul, Minn.-based nonprofit organization that works to advance renewable energy in the Midwest.
“More wind energy is produced in our county than anywhere else in the state, and that has been a good thing for Mower County,” said Gabrielson. “Not only does this economic development benefit local landowners and businesses who have partnered in the wind projects – our entire community benefits from the production tax revenue received by our county. This last year, the county board committed $400,000 of the county portion of revenue from the wind energy production tax toward improving roads and bridges. We’ve used the remainder as a tax relief for citizens.”
“Minnesota is truly a leader in renewable energy in the Midwest, and Mower County is reaping the benefits of that leadership,” said State Sen. Dan Sparks. “The county has received over $14.8 million in wind energy production tax payments since 2007. That revenue helps our entire community because it helps keep the lid on property taxes, helps pay for road improvements and supports community projects. We need to continue supporting wind energy development in Minnesota.”
According to Wind on the Wires, the wind industry has invested $6.8 billion into Minnesota’s economy. With 3,499 MW of installed capacity, wind power now provides 17.7% of Minnesota’s electricity. In addition, another 906 MW of wind is under construction or is in advanced stages of development in Minnesota.
“Wind energy is a true success story for Minnesota, providing investment, revenue and jobs across the state,” added Chris Kunkle, regional policy manager for Wind on the Wires. “The cost of wind energy has declined 66 percent over the past seven years, and utilities like Xcel Energy are passing those savings along to customers.
“This year, for the first time, the revenue from the wind energy production tax exceeds $12 million. Cumulatively, over the past 10 years, the wind industry has paid more than $78 million in production taxes. More than one-quarter of the counties in the state benefit from this revenue source, predominantly in greater Minnesota, where the jobs and economic development are needed most,” Kunkle said.
Block Island Project Not To Blame For Whale Death
In response to the whale carcass recently discovered on a beach in Jamestown, R.I., and the suggestion by local newspapers that the death of the creature may have been caused by the Block Island Wind Farm, the state’s Coastal Resources Management Council (CRMC) is claiming there is no scientific evidence to prove the theory.
The government office cites information from the U.S. Bureau of Ocean Energy Management (BOEM), which says there has been no scientific evidence collected to date of any whales being injured or stranded due to offshore wind activities.
Moreover, observed data collected shows that operational offshore wind turbines generate sounds that are relatively low (approximately 134 decibels at the Block Island site); in comparison, rainstorms range from 100 to 120 decibels, and fishing vessels create sounds from 150 to 190 decibels, the CRMC says.
The council also claims that baleen whales do not use sonar to navigate or feed and are classified as low-frequency (10 to 31 kHz) vocalizers; they generally produce grunts, moans and pulse trains to communicate. The operational underwater noise measured at the Block Island Wind Farm can possibly be heard by whales over short distances but is likely not heard beyond a few hundred meters from the foundation, according to the CRMC.
The council also cites scientific literature based on data collected in the U.K. stating that “underwater noise from operation[al] wind facilities is not considered significant.”
According to the CRMC, BOEM reportedly plans to continue to monitor and assess potential impacts related to the construction and operation of wind farms on marine life, specifically whales, through the Environmental Studies Program and data collected from lessees and state and federal partners.