Virginia Offshore Wind Studies, July 2007 to March 2010 Final Report
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Virginia Offshore Wind Studies, July 2007 to March 2010 Final Report TITLE PAGE 20 April 2010 Dr. Patrick G. Hatcher Mr. Kenneth F. Newbold Old Dominion University James Madison University VCERC Executive Director VCERC Virginia Wind Energy Center Program Manager Dr. Jonathan J. Miles Mr. George M. Hagerman, Jr. James Madison University Virginia Tech VCERC Virginia Wind Energy Center Advanced Research Institute Technical Director VCERC Primary Author Virginia Offshore Wind Studies, July 2007 to March 2010 TABLE OF CONTENTS TITLE PAGE....................................................................................................................................... i TABLE OF CONTENTS ....................................................................................................................... ii DISCLAIMER OF WARRANTIES AND LIMITATION OF LIABILITIES..................................................... iv ACKNOWLEDGEMENTS..................................................................................................................... v EXECUTIVE SUMMARY..................................................................................................................viii VIRGINIA COASTAL ENERGY RESEARCH CONSORTIUM OVERVIEW AND FUNDING.......................... 1 VCERC Background............................................................................................................... 1 VCERC Membership .............................................................................................................. 1 VCERC State Funding and Associated Projects..................................................................... 1 OFFSHORE WIND RESEARCH RESULTS............................................................................................. 3 Project 1: Feasibility-Level Design and Economic Assessment............................................ 3 Validation of VCERC Offshore Wind Cost Model.............................................................. 9 Offshore Wind Downside Potential Risks......................................................................... 15 Offshore Wind Upside Potential Opportunities................................................................ 17 Environmental Effects....................................................................................................... 19 Project 2: Preliminary Mapping of Offshore Areas............................................................. 23 Project 3: Evaluation of Economic Development Potential................................................. 28 OFFSHORE WIND RECOMMENDATIONS .......................................................................................... 30 Commercial Development Roadmap.................................................................................... 30 Applied Research Roadmap.................................................................................................. 33 Wind Turbine Design ........................................................................................................ 33 Coastal Turbine Demonstration Project........................................................................... 34 Offshore Installation ......................................................................................................... 35 Electrical Interconnection and Transmission................................................................... 36 Economic Model Validation ............................................................................................. 39 Government Policy Roadmap ............................................................................................... 40 Federal Policy Recommendations .................................................................................... 40 State Policy Recommendations......................................................................................... 41 Offshore Wind Potential in State Waters.......................................................................... 43 Offshore Wind and Offshore Oil and Gas......................................................................... 47 Regional Policy Recommendations................................................................................... 50 OFFSHORE WIND CONCLUDING REMARKS..................................................................................... 53 LIST OF REFERENCES ..................................................................................................................... 54 Final Report ii 20 April 2010 Virginia Offshore Wind Studies, July 2007 to March 2010 BOUND SEPARATELY APPENDIX A: COST, PERFORMANCE, AND FINANCING DATA FOR REFERENCE BASELINE OFFSHORE WIND PROJECT AND FOSSIL FUEL GENERATION PROJECTS APPENDIX B: HISTORICAL CURRENCY EXCHANGE RATES USED FOR OFFSHORE WIND CAPITAL COST EVALUATION APPENDIX C: ESTIMATES OF CAPACITY FACTOR AND REVENUE PER UNIT CAPACITY FOR DIFFERENT WIND TURBINES OFF VIRGINIA APPENDIX D: POTENTIAL EFFECTS OF VIRGINIA OFFSHORE WIND DEVELOPMENT ON BIRDS APPENDIX E: SELECTED REFERENCES ON OFFSHORE WIND ENVIRONMENTAL EFFECTS APPENDIX F: IDENTIFICATION OF 25 MMS LEASE BLOCKS FOR NEAR-TERM OFFSHORE WIND DEVELOPMENT ON VIRGINIA’S OUTER CONTINENTAL SHELF APPENDIX G: DEVELOPMENT AND INSTALLATION TIMETABLES FOR THREE LARGE EUROPEAN OFFSHORE WIND PROJECTS Final Report iii 20 April 2010 Virginia Offshore Wind Studies, July 2007 to March 2010 DISCLAIMER OF WARRANTIES AND LIMITATION OF LIABILITIES The Virginia Coastal Energy Research Consortium (“VCERC”) was established in Chapter 6 of the Virginia Energy Plan, passed August 2006. VCERC was created to “serve as an interdisciplinary study, research, and information resource for the Commonwealth on coastal energy issues.” For more information on VCERC visit http://www.vcerc.org. While VCERC believes the information in this document to be complete and accurate, it makes no assurances, endorsements, or warranties, expressed or implied, as to the completeness, validity, and accuracy of the information contained herein. Any actions taken as a result of this document are not the responsibility of VCERC, VCERC’s individual University, government and industry partners, the Commonwealth of Virginia or any agency thereof, or any of their employees, directors, officers, contractors, advisors, members, affiliates, successors and agents (herein referred to as VCERC et al.). VCERC et al. assumes no legal liability or responsibility for the accuracy, completeness, or usefulness of any information, apparatus, product, or process disclosed, or represents that its use would not infringe on privately-owned rights. All company names, logos, and products mentioned herein are trademarks of their respective companies. Reference to any specific company or product is not be construed as an endorsement of said company or product by VCERC et al. The information in this report may contain some forward-looking opinions, but unanticipated factors could change the actual results to differ from some of the opinions herein contained. Forward-looking opinions are based on historical and/or current publicly accessible documents or conversations about future operations, strategies, financial results or other developments. Some unanticipated factors that may change the results of this document may include, but are not limited to, regulatory developments, technological changes, competitive conditions, new products, changes in tax laws, general economic conditions both domestically and abroad, and other unanticipated changes associated with individual developments as they relate to the larger industries discussed. The research presented by VCERC and its members was sponsored by the Commonwealth of Virginia General Fund. VCERC and each of its members strongly support academic freedom and a researcher’s right to publish; as a consortium, however, neither VCERC nor its members endorse the viewpoint of any publication or guarantee its technical correctness. The Primary Author is solely responsible for any omissions or errors contained herein. This report should be referenced as follows: Virginia Coastal Energy Research Consortium, 2010. Virginia Offshore Wind Studies, July 2007 to March 2010, Final Report. 67 pp. Final Report iv 20 April 2010 Virginia Offshore Wind Studies, July 2007 to March 2010 ACKNOWLEDGEMENTS The work of the Virginia Coastal Energy Research Consortium (VCERC) would not have been possible without the creation of VCERC by the Virginia Energy Plan legislation introduced by state Senator Frank Wagner during the 2006 General Assembly session, and the subsequent monetary support of $1.5 million provided by the state’s General Fund, as legislated in the 2007 General Assembly session through budget amendments sponsored by Senator Frank Wagner, Senator Edward Houck, Delegate Phillip Hamilton and Delegate Leo Wardrup. Despite statewide budget cuts that reduced the initial appropriation by 11%, this inaugural funding from the Commonwealth enabled us to assemble a strong offshore wind team and begin research on our three core offshore wind projects. Governor Timothy Kaine included VCERC in his FY 2008/2009 biennium budget request for a total of $1.5 million to be divided between the two years. During its 2008 legislative session the General Assembly generously agreed to move the second year of funding up, to be combined with the 2008 request in order to maintain level funding of VCERC so that work could continue uninterrupted on the projects initiated in the previous fiscal year. Through the state legislative