Trump Admin Pauses Offshore Wind Projects and Dominion’s Costs Will Balloon More

The inefficiencies (especially compared to alternative generation) and the extreme costs to electricity customers of Dominion Energy didn’t put a stop to the utility’s development of the Coastal Virginia Offshore Wind (CVOW) project.

Nor did concerns about endangerment to the breeding habitat of the North Atlantic right whales along the Eastern seaboard.

Now, however, the Trump administration has determined there is another good reason to pause all offshore wind projects: national security. The decision was announced on Monday, per CNBC:

The Trump administration on Monday halted Coastal Virginia Offshore Wind, the largest project of its kind in the U.S., as well as four other projects under construction off the East Coast in a devastating blow to the wind industry.

 

Shares of Dominion Energy, the utility developing the project, dropped more than 5% on the news…

 

Interior Secretary Doug Burgum said the administration paused leases for the projects due to national security concerns identified by the Pentagon…

 

Coastal Virginia Offshore Wind is a 176-turbine project that would provide enough power for more than 600,000 homes, according to Dominion. The project was expected to be complete next year.

 

Dominion said the massive project is essential for U.S. national security and Virginia’s dramatically growing energy needs. Northern Virginia is the largest hub for data centers in the world. Growing demand from artificial intelligence is contributing to higher electricity prices in the state…

 

The Interior Department said in a statement that the pause will give the federal government time to “work with leaseholders and state partners to assess the possibility of mitigating the national security risks posed by these projects.”

 

Interior said the U.S. government found that turbine blades and “highly reflective towers” create radar interference risk.

CVOW is located off the southern coast of the state from the Hampton Roads area, which houses a major naval shipyard and Naval Air Station Oceana, home to major military fighter squadrons. So clear radar capabilities are important, obviously. Similar concerns have thwarted many onshore wind projects over the years.

As for NLPC — which is a Dominion Energy customer, shareholder, and is also a co-plaintiff in a lawsuit against the company regarding the aforementioned whales — we have several concerns about the impacts of CVOW, many of them having to do with costs. In February, we asked Secretary Burgum to pull the permits and kill the project.

It’s indisputable that the top two choices of renewable energy supporters — wind and solar — are impractical, inefficient and far more expensive than more traditional electricity-generating sources like nuclear, coal and natural gas, which is why they are only produced and deployed where they get regulatory favor and more importantly, taxpayer subsidies.

This latest regulatory hiccup further highlights the ill-advised decision by Dominion Chairman/CEO Robert Blue to force the project, despite knowing all the inefficiencies and cost overruns that accompany such endeavors. Both predictable and unpredictable wild cards such as ocean habitats, lawsuits, government permits, environmental studies, unforeseen additional costs, etc., make planning with any certitude impossible.

Without getting into the weeds about things like “nameplate capacity,” the folly of CVOW can be explained in a few basic facts. The 176 turbines will cover an ocean lease area of 112,800 acres. A natural gas plant that would produce an equivalent amount of electricity — such as Dominion’s Greensville County Power Station in Virginia — sits on about 1,100 acres of land. The difference in surface area required works out to about 43 acres per MWh produced for wind, compared to .3 to .7 acres per MWh produced for a natural gas plant.

As for construction costs, CVOW’s estimate is now at $11.2 billion, which will go up again due to the Trump administration’s pause. When the project was being discussed in the context of Virginia’s legislature and governor putting together subsidies and cost recovery plans for the project in 2019, the estimate was $7.3 billion to $8 billion. When final costs were approved related to the state’s utility commission, the estimate was $9.8 billion. By February this year, the estimate was up to $10.7 billion.

Construction costs for an equivalently power-producing gas plant is $1.5 billion-$2 billion. And generally, lifespans for natural gas plants project to last up to 10 years longer than wind farms.

Plus Dominion had a special ship built (called the Charybdis) for $715 million which is capable of installing the wind turbines. The cost is borne by shareholders, but the use of the vessel for constructing CVOW is recovered by Virginia ratepayers, and the goal is to lease the ship out for other wind projects — which of course are all now on hold in the U.S.

And renewable advocates like to claim that the “fuel” for wind plants is “free,” compared to having to buy gas for traditional power plants. But the wind doesn’t always blow (meaning in power plant terms that it is not “dispatchable”), and thus must be backed up by battery storage (also inefficient) or…natural gas power plants. When gas plants sit idle as backup, they are wasted capacity, and when they are turned on and off again, they use more energy and thus pollute more than they would if they ran consistently (as they should be intended to do). Think of it in comparison to automobile gasoline efficiency driving in the city vs. on the highway.

The cost recovery for CVOW is tiered between Dominion’s customers and its shareholders, and as the project balloons, it’s not a pretty site for either:

While cost certainties are not exact for gas power plants either, they are far more tried and true. And dispatchable. And reliable. And affordable. And reasonably clean, especially if you don’t accept that carbon dioxide is a pollutant and causes global warming.

Earlier this year NLPC presented a shareholder proposal at Dominion’s annual meeting that called for the elimination of non-carbon (dioxide) emitting generation goals from executive pay incentives (like those that Robert Blue enjoys). Such targets only motivate poor decisions like greenlighting CVOW.

For next year, NLPC will sponsor a proposal at Dominion’s annual meeting that calls for Blue to have to give up either his Chairman or CEO role, in order to affect more accountability between the Board of Directors and executive leadership.

Here is NLPC’s statement (along with its co-plaintiffs) about the Trump administration’s decision to pause CVOW. And below is a brief video about the whale lawsuit.