VECT Editorial

A recent article published by Virginia Mercury: Dominion Says New Offshore Wind Deal Won’t Impact Rate Payers, is more interesting for what it does not say. As the California energy cost debacle is foreshadowing the impacts and outcome of the Virginia Clean Economy Act, we have reached a point now that the law needs to be modified to allow an ‘all of the above’ energy approach as presented by Gov. Youngkin, and wait for the advancement of off shore wind turbine technologies and structures from where they are today to make the costs and environmental impacts digestible for Virginia rate payers.

A necessary key modification to the VCEA must be that for Dominion’s Coastal Virginia Offshore Wind project, the electricity generated must be sold into the market place, and not be paid for and the sole responsibility of Virginia rate payers as it is now. As this electric generating project will be the single highest cost power generation in the United States, bar none, it should facilitate the rethinking of the necessity and value of following through to completion.

The now published sale of 50% of the project to Stonepeak for approximately $3 billion, was to reduce Dominion’s financial risk and exposure. Inside the halls of Dominion, have they lost confidence in the project? ‘Likely’. The announcement gave a temporary $5 per share boost to Dominion stock, but has dropped back by $3 (as of this writing). There are several reasons why the Dominion share price is half of what it was 18 months ago, and a key one is CVOW. The analysts know this is non-competitive carbon free energy. Even the $23 per KW subsidy by the Federal Govt will not pull this one out from being a loser. For comparison, the cost and operation of CVOW will be approximately 4x the cost per MWhr vs new nuclear generated power.

The ever-increasing cost of CVOW, now projected to exceed $20 billion by independent analyst assessments, as well as financial institutions, will increase monthly Dominion residential rate payer bills from the originally projected $14 per month to now $40 to $50 per month under the current VCEA law. The original $9.8 billion cost for 176 wind turbines rated at 14.8 MW each, was in 2018 dollars for labor, materials, support vessels, and at the time interest rate costs. We know the compounded inflation since then is about 40% for materials, labor, and 60% for support vessels, as well as current interest rate increases on borrowed money. The $13.8 billion cap negotiated with the Youngkin administration has easily been surpassed, but is not public at this time. The annual operation and maintenance costs have also not been made public therefore we only have experience at other offshore wind installations to go by. The average is about 15% of original investment annually. This means a minimum of $1.5 billion annually.

Additionally, assuming no design failures of the turbines, Dominion projected 46% uptime, but would not commit to the SCC’s request for guaranteed 42% uptime (time the turbines are actually spinning and generating electricity). There is no offshore wind in the US (and possibly the world) that has exceeded 40% uptime (on a continuous basis), with the best on the East Coast being the Rhode Island Block Island project averaging 35% uptime. This calculates to about 8 million MWhrs of generation per year, well below what has been published.

Expect delays – we know the contracted turbine supplier, Siemens, is completely redesigning these turbines due to their horrific operational failures. All the piles and turbines will be imported from Europe, as Siemens will not move forward with assembly and construction of them in Norfolk as promised (jobs and tax revenue). The Charybdis, the Dominion vessel supporting installation of the piles and turbines, is 2-3 yrs delayed and currently $200 million over budget, probable that further delays are coming and higher costs. It is highly unlikely this project will generate any power by 2026 as Dominion claims. As we all know, delays cost money, and we Virginia rate payers will be on the hook for all of it.

In 2015, President Obama commissioned a military review of offshore wind impacts on national security. The report strongly recommended against offshore wind installations due to the interference and obstacles they would create for the Navy’s and Coast Guard’s ability to patrol and provide comprehensive shoreline security. The report also said there would be no way to prevent offshore wind installations from hostile attacks. The current administration has clearly ignored the report, and is further willing to put national security at high risk.

Additionally, more information is surfacing on the environmental impacts of offshore wind. Dominion’s Environmental Impact report was redacted, and not available to the public. Ironically, all the other East Coast offshore wind project reports are available, and all of them mention their projects will likely kill at least 30 whales, as wells as additional porpoises and dolphins. Offshore wind turbines churn the surrounding waters to mix the thermoclines which further disrupt aquatic life. The recent BOEM report had no facts supporting their conclusion that offshore wind has no impact on aquatic life, ironically when all the offshore wind developers indicated there would be, and therefore can be discounted and just a political statement supporting the current Administrations goals. True environmental groups like Environmental Progress, university professors and oceanographers have disputed the BOEM report and requested further offshore wind development be put on hold until real data is generated.

The Virginia Energy Consumer Trust does not support CVOW at the current ‘Any Cost’ status. We cannot make Virginia residents pay for unreliable, intermittent, unsecure, and exorbitant cost energy. There are better, more cost efficient, and secure solutions to carbon free energy that Virginia needs to embrace to remain affordable, livable, and an environmentally sound place for businesses and residents to invest and reside in.

The Virginia Energy Consumer Trust is a 501c 4 organization. We are advocates for Virginia’s environmental and conservation preservation and improvement, and policies to stay on this roadmap while fulfilling Energy Justice, energy affordability, a sound state economy, high quality job growth, an improved standard of living, and national security. All energy sources have their benefits and drawbacks, and we seek to have the optimum mix that supports our vision for our state. Our goal is to be a voice for Virginia residents and businesses with data and facts that are in all our interests.

David DelGuercio

Executive Director

Virginia Energy Consumer Trust


Discover more from Virginia Energy Consumer Trust

Subscribe to get the latest posts to your email.

Tags:

Leave a Reply

Discover more from Virginia Energy Consumer Trust

Subscribe now to keep reading and get access to the full archive.

Continue reading