April 7, 2010
On April 2, 2010, Va. Gov. Bob McDonnell signed several green energy bills into law that passed the General Assembly’s 2010 session. SB577 (McEachin and Wagner) and HB389 (Janis), which passed both houses unanimously, create the Virginia Offshore Wind Development Authority to facilitate and support the development of the offshore wind industry and wind-powered electric energy facilities off the coast of Virginia.
Virginia’s proximity to offshore wind resources and deep water ports puts it in a position to be one of the nation’s leaders in the development of offshore wind farms. According to the Virginia Coastal Energy Research Consortium (VCERC), offshore wind could produce at least 20% of Virginia’s electricity needs over the next 10 – 20 years.
In addition, VCERC has found that a single wind farm of about 200 wind turbines (500 – 600 Megawatts) could generate roughly 1,000 new jobs. These findings have prompted two developers to submit offshore lease applications to the Minerals Management Service of the U.S. Department of the Interior.
Interest in offshore wind resources is expanding rapidly, and as much as $15 billion could be invested in the offshore wind industry on the East Coast over the next 10 – 15 years. However, numerous challenges to the development of offshore wind along the East Coast remain as the cost of offshore wind generation continues to be substantially higher than traditional generation, including onshore renewable resources.
In Europe, offshore wind is a proven source of renewable energy where more than 25 offshore wind projects have been successfully installed. In Denmark, 20% of the country’s energy demand is met by wind power, with about half from offshore wind farms. Currently, the world’s largest wind farm facility is being planned off the coast of England, scheduled to be operating in 2012. The project consists of 341 wind turbines over a 90-mile area, and it is expected to power 750,000 homes.
Under the new law, the Virginia Offshore Wind Development Authority will:
Gov. McDonnell also signed HB1022 (Hugo) into law. This bill will result in offshore wind projects counting triple credit toward Virginia’s renewable energy portfolio standard goal.
McGuireWoods LLP regularly assists clients with all aspects of renewable energy projects, including project finance, corporate formation and structuring, energy asset purchases and sales, negotiation of power marketing agreements, energy regulation before FERC and state regulators, transmission projects, and licensing and permitting matters. For further information on related renewable energy matters, please contact the authors.