The price to build Dominion Power’s planned 12MW offshore wind project off Virginia has dropped by as much as $100m but the utility continues to hold off on a final investment decision over concerns about ratepayer impacts.
The US utility held a second round of bidding on the two-turbine demo after construction costs off Virginia Beach escalated to $400m, nearly double the initial estimate of $230m.
The latest figures total $300m to $380m, Dominion VP generation construction Mark Mitchell said in a conference call. “We expect to come in at the lower end of that range,” he said.
Dominion divided the project into four packages to try to lower costs. It received two bids for transportation and installation of foundations and turbines; one bid for design, manufacturing, transportation and installation of subsea cables; four bids for foundation fabrication; and one bid for onshore connection facilities.
The highest cost is for the marine component, which is the “most significant remaining uncertainty in the project”, he said.
Bids included a proposal from Fred Olsen Windcarrier using specialist jack-up vessel Brave Tern, which will install turbines at Deepwater Wind’s 30MW Block Island pilot project in Rhode Island later this year.
Dominion officials plan to meet in early May with the US Energy Department, which is contributing up to $51m, to discuss potential paths forward and timelines.
The demonstration scheme, dubbed VOWTAP, has a 31 May 2016 milestone deadline to receive the next DoE instalment. “We do feel we’ve largely met the requirements,” said Mitchell.
Project partners already have spent $25m with the lion’s share coming from Dominion and the DoE.
The utility expects to release another project update this summer and make a final decision on next steps by July. If all goes to plan it will then seek regulatory approval to pass on the cost to ratepayers.
The earliest possible in-service date is 2018, said Mitchell.
The Virginia demo comprises a pair of GE Haliade 150 6MW turbines on Keystone twisted jacket foundations 27 miles off Virginia Beach.
Mitchell called the merger between GE and Alstom “a positive” that did not create any impacts on project costs or forecasts.
The site lies next to Dominion’s 2GW commercial lease area, which is slated for staged development in 2020 to 2025. “We continue to meet all our requirements for the commercial lease and VOWTAP is the first step in that process,” said Mitchell.
Image: Dominion is planning to build off Virginia Beach (reNEWS)
