Dominion Virginia Power wins second U.S. offshore wind power lease auction

Dominion Virginia Power offshore wind lease auction Virginia Beach Deepwater Wind New England

The U.S. Interior Department has named Dominion Virginia Power, a subsidiary of Dominion (NYSE: D), the winner of the second U.S. competitive lease auction for offshore wind power project sites. Dominion won the auction with a bid of $1.6 million.

Although eight companies were approved to bid, only Dominion Virginia and Apex Virginia Offshore Wind LLC competed in the six-round auction conducted by the Bureau of Ocean Energy Management (BOEM). The U.S. Attorney General, in consultation with the Federal Trade Commission, will have 30 days to complete an antitrust review of the auction.

The auction was for the use of 112,799 acres on the Outer Continental Shelf approximately 23.5 nautical miles off Virginia Beach. According to the Interior Department, the site has the potential to support 2,000 MW of wind power generation.

Dominion Virginia Senior Vice President-Alternative Energy Solutions said the company will now proceed with the BOEM timetable to develop the area while continuing its research proposal and looking for ways to lower the cost of bringing offshore wind power to customers.

The lease has a preliminary term of six months to submit a Site Assessment Plan to BOEM for approval. Once the plan is approved, Dominion Virginia will have 4.5 years to submit a Construction and Operations Plan for approval. If that is approved, Dominion Virginia will have an operations term for 33 years.

According to  Dominion Virginia, the company is involved in other offshore wind research projects, including working on one of seven projects awarded $4 million each in federal matching funds to start initial engineering, design and permitting for a demonstration facility of two six-MW turbines. Three of those projects will be selected by the Department of Energy to move forward with final design, permitting and construction of the demonstration projects.

The initial auction of a site for an offshore wind power project, held on July 31, was won by Deepwater Wind New England LLC.  That auction was for 164,750 acres offshore Rhode Island and Massachusetts and generated $3.8 million.

BOEM is expected to announce additional auctions for offshore wind power sites later this year and in 2014. Future sites are expected to be located offshore Maryland, New Jersey and Massachusetts.

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