By Steve Haner
The Kitty Hawk North windfarm off the coast of North Carolina, stalled because of its need to bring transmission cables ashore under Virginia’s Sandbridge Beach neighborhood, now has a new owner, a new name and a new lease on life. It is hard to imagine Dominion Energy Virginia would buy it without some plan to overcome the current local objections in Virginia Beach.
Also, Dominion Energy ratepayers will soon have another reason to sweat out future Atlantic hurricanes. We must all now forget the media frenzy of the last few weeks about how Hurricane Beryl was such a record breaker at Category 5 and thus a harbinger of future climate doom.
Within hours of the public announcement Monday that Dominion Energy Virginia would pay Avangrid $160 million to take over its lease and permits off the Outer Banks, Dominion officials hosted a meeting with some of the Sandbridge Beach residents who have been the roadblock. The quick engagement was greatly appreciated, said Joe Bourne, a leader of the Protect Sandbridge Beach Coalition, but the group’s basic objections to bringing the cables there have not changed. This is “early days,” he said.
Dominion has always been planning to build more offshore wind turbines after finishing the $10 billion Commonwealth of Virginia Offshore Wind project now under construction off Virginia Beach. Its most recent integrated resource plan included a second wave of wind development of roughly equal size to the first tranche, scheduled to begin operation in 2026.
But the utility was expected to expand CVOW into a new 176,000-acre lease area immediately adjacent to it but further out to sea. That new lease area will be among several auctioned by the federal government in August.
The Kitty Hawk North project planned by Avangrid, a European energy developer, is substantially smaller than the existing CVOW project and the possible second phase further out. It covers about 40,000 acres. It is likely to include less than a third as many turbines and produce on windy days less than a third as much electricity as CVOW. Much of its early regulatory spade work has been done. Avangrid will retain ownership of Kitty Hawk South.
Because Dominion plans to develop only a third of the full Kitty Hawk lease area, it will only need to bring two huge cables ashore under the Sandbridge Beach area, not the six that Avangrid was planning. Bourne indicated that Dominion stressed that in the meeting it held Monday, and again, it was viewed as positive, but added: “We don’t have blinders on.”
Dominion could do both CVOW South and the westward expansion of the first turbine field. In making its announcement on Monday the company focused on expectations of massive growth in demand for its electricity. Exactly what Dominion is thinking hasn’t been made clear, but here are three things to keep in mind.
First, if Dominion does proceed on both the Kitty Hawk leasehold and what others expected to be the area for CVOW II, certain economies of scale may be available from the various manufacturers of the towers, turbines and blades and the installation contractors.
Second, Dominion has already successfully negotiated a deal to sell a 50% ownership share in CVOW phase one. The new partnership, still under regulatory review, is expected to fill the company’s coffers with fresh investment cash and reduce its own project risk. The exact same move of finding a non-controlling cash partner is probably under consideration in the planning for CVOW-South and CVOW II.
Third, a working group dominated by the wind and solar manufacturers and environmental advocates is already contemplating major changes in the existing Virginia Clean Economy Act. Now Dominion may have added motivation to support a change in the law that makes it easy to override the kind of local objections that have created the roadblock to the Kitty Hawk’s cables. The Sandbridge residents were aware of and opposed 2024 bills that sought to weaken local control, Bourne said.
Norfolk’s WTKR, in its coverage of the Dominion Kitty Hawk announcement, asked the company again about the need to bring any power generated ashore through the Sandbridge location. It seems nothing on that front has changed. In a statement to the television station, Dominion said what Avangrid was saying last year:
“We do not currently have the electric transmission infrastructure necessary along the northeast coast of North Carolina to land the cables in reasonable proximity to the CVOW-SOUTH lease area. Future cable landings in North Carolina would require network upgrades to prepare the grid there to receive offshore wind generation. Network upgrades are determined by our regional transmission organization PJM which coordinates the movement of wholesale electricity…”
When Virginia Beach City Council held a public hearing on the Avangrid plans in May 2023, Dominion Energy officials were visible in the crowd listening intently. Avangrid was also using the Virginia Clean Economy Act, which creates a presumption that offshore wind is in the public interest, as a justification for building out its project. Bourne said the announcement Monday was not a total surprise as Avangrid in company releases has been open about seeking a buyer.
It remains the case that only in Virginia, thanks to our pliant General Assembly, are captive utility ratepayers holding the financial risk if a project like this either fails to produce the expected level of electricity or fails to operate for the decades promised. In other states the plants are owned by independent companies that simply sell the power to a utility or to the grid under contract but take upon themselves much of the risk of failure.
So, hope all the scaremongers are wrong about the horrible ocean storms in our future due the so-called existential threat of catastrophic climate change.