Dominion eyes offshore Maryland

Utility holding company Dominion today filed with the US Interior Department (DOI) to be among the bidders seeking commercial wind energy development in two lease areas off the coast of Maryland.

In December, DOI announced a proposed “notice of sale” for the 132.3sq km North Area and 190.1sq km South Area. Each area contains five whole blocks and some partial ones.  The areas are located between 18.5km and 42.5km from shore off Ocean City.

Based on an analysis done by the National Renewable Energy Laboratory (NREL), both areas if fully developed, could support 850MW and 1.45GW of commercial wind generation, respectively,  enough electricity for 300,000 average-sized Maryland homes.

A 60-day public comment period on the proposed “notice of sale” ended today. DOI’s Bureau of Ocean Energy Management (BOEM) will now consider comments received before publishing a “Final Sale Notice” that will detail the time and date of the lease sales.

BOEM oversees wind energy development in federally-owned coastal waters.

A date for the auction has not been set, but is expected in 2014.

Last September, Dominion was the successful bidder in BOEM’s auction for a wind energy lease area 24 miles (38.6km) off the coast of Virginia.

"Offshore wind shows the most promise for building utility-sized renewable energy projects in the Mid-Atlantic region," says Mary Doswell, senior vice president for Dominion's Alternative Energy Solutions unit.

She adds that BOEM’s offshore tracts offer both the consistent winds and the acreage to develop large-scale projects.  “Given the proximity to our leased area off of Virginia and the excellent port in Hampton Roads, there should be economies of scale that could benefit both regions," notes Doswell.

Last year, Maryland Governor Martin O’Malley signed a bill into law that provides a 20-year taxpayer subsidy for development of a 210MW offshore wind farm.

Under the law, household electric rates will increase by up to an estimated $1.50 per month, with most businesses paying a 1.5% monthly surcharge on their bills. The rate hikes would not take effect until after the wind farm is operational, which O’Malley’s administration hopes will be in 2018.

Maryland already requires that 20% of its electricity come from renewable sources by 2022. The law creates a carve-out within the RPS for offshore wind.

The law also creates offshore wind renewable energy credits, or ORECs, that will be awarded to offshore wind farm operators on a megawatt-hour production basis.  It obligates the state’s investor-owned electric utilities to purchase both the project’s electricity and ORECs, which they can use to help meet RPS compliance. The state Public Service Commission will launch and supervise the programme.

Dominion has received two offshore wind energy technology awards from the US Department of Energy.  The first is a $500,000 grant with a goal to find innovative ways to reduce the cost of offshore wind generation by 25%. The second is a $4 million cost share for the initial development of an offshore wind turbine demonstration project.

Dominion has completed the initial development of its demonstration project for the Virginia Offshore Wind Technology Advancement Program.  It is one of six firms being considered for a $47m grant to complete development of their demonstration projects.

If successful, Dominion would continue advancing its plan to build two 6MW wind turbines off the Virginia coast.,