Virginia offshore wind research lease

The U.S. federal agency responsible for leasing offshore wind sites on the outer continental shelf has executed its first wind energy research lease, giving Virginia's state energy agency the right to pursue the Virginia Offshore Wind Technology Advancement Project (VOWTAP), a 12-megawatt offshore wind test facility to be located in federal ocean waters.

Offshore wind energy offers the potential to generate large amounts of electricity from a renewable resource, but to date no commercial grid-tied U.S. offshore wind projects are operating.  The U.S. Bureau of Ocean Energy Management is responsible for leasing sites on the outer continental shelf for energy projects, including offshore wind and other renewable energy developments.  BOEM has auctioned off sites for offshore wind projects off several East Coast states, including Virginia, but had not previously issued a research lease.

On March 24, BOEM announced the execution of a wind energy research lease with the Commonwealth of Virginia’s Department of Mines, Minerals and Energy (DMME).  Under research lease OCS-A 0497 (35 pages), the Virginia agency proposes to design, develop and demonstrate a grid-connected, 12-megawatt offshore wind test facility on the Outer Continental Shelf off the coast of Virginia, in partnership with a local utility affiliated with Dominion Resources, Inc.

The 30-year lease covers approximately 2,135 acres of sea space east of Virginia Beach, adjacent to the Wind Energy Area leased to Virginia Electric and Power Company (dba Dominion Virginia Power) for commercial development since 2013.  The lease describes the project as "a research project to generate energy using wind turbine generators and conduct any associated resource assessment activities, as well as install associated offshore substation platforms, inter-array cables, and subsea export cables."  As a research lease, the Virginia agreement does not include any fees payable from DMME to BOEM "for the purpose of ensuring a fair return for the use of this lease area."

As is standard for BOEM's offshore wind site leases, the lease itself does not give the lessee the right to build or operate an offshore wind project.  Rather, the lease gives the Virginia DMME the exclusive right to submit to BOEM for approval a Site Assessment Plan and a Research Activities Plan, and then to allow a designated operator to conduct whatever activities are described in those plans once they are approved by BOEM. 

In this case, DMME has designated Dominion subsidiary Virginia Electric and Power Company as the lease operator.  Dominion's partnership with DMME on offshore wind dates back at least to 2012, when the U.S. Department of Energy announced funding awards for seven proposed Offshore Wind Advanced Technology Demonstration Projects.  Dominion won one of these 2012 awards, and partnered with DMME and others to establish VOWTAP.  VOWTAP won a second funding award from DOE in 2014 for deployment activities.

Dominion and DMME have already filed a Research Activities Plan for VOWTAP.  With the research lease in hand, the path forward includes approval of that plan and a Site Assessment Plan by BOEM.  If the VOWTAP project is built, the data obtained and lessons learned from this project will be made publicly available and inform the future production of renewable energy within the adjacent commercial Wind Energy Area leased to Dominion.