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Va. offshore wind could see thriving supply chain, but port investments needed

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Va. offshore wind could see thriving supply chain, but port investments needed

Virginia could fulfill its dream of becoming the East Coast hub for the U.S. offshore wind supply chain if it establishes partnerships with neighboring states and an office to support Gov. Ralph Northam's 2,000-MW offshore wind target by 2028. However, most of the state's ports will need upgrades to handle the supply chain.

In a report commissioned by the Virginia Department of Mines, Minerals and Energy, or DMME, London-headquartered consulting firm BVG Associates recommended that the commonwealth have a person lead a "Virginia Office for Offshore Wind" to coordinate stakeholder engagement and be a point of contact for the state's offshore wind activities.

"Virginia has a clear opportunity to act as a leader in driving the development of the U.S. offshore wind industry," Northam said in a Dec. 27 statement. "Growing the supply chain sector at this early stage will prepare Virginia to competitively deliver the development of our own offshore wind resources in the coming years."

In addition, the DMME said it has held talks with Maryland, North Carolina and South Carolina on developing "a multi-state regional supply cluster," though it is open to other states interested in collaborating on offshore wind activities. BVG Associates' report suggests that regional collaboration would accelerate maturation of local supply chains and cost-effectiveness while avoiding redundant investments.

"Regional approach will strengthen operations, attract anchor tenants and accelerate the [offshore wind] industry, making it more competitive on a global scale," the report said. "A collaborative and co-operative approach to supply chain clustering among regional states will create a much larger collective opportunity."

BVG Associates pointed out that the mid-Atlantic and the Southeast U.S. are home to a combination of confirmed projects, wind energy lease areas and potential leases that could be developed up to more than 10,000 MW. To date, only about 400 MW comes from confirmed projects with an estimated commercial operation date: the 12-MW Coastal Virginia Offshore Wind (Virginia Offshore Wind Technology Advancement Project) from Dominion Energy Inc. subsidiary Virginia Electric and Power Co., doing business as Dominion Energy Virginia, and Ørsted A/S; the 120-MW Skipjack Offshore Wind Project from Ørsted; and the first phase of US Wind Inc.'s Ocean City Offshore Wind Project.

Another headwind for Virginia's supply chain ambitions is that the majority of the state's ports either will need major upgrades and investments to handle utility-scale offshore wind projects' complex supply chain or are unsuited to handle different manufacturing components such as blades and subsea cables. Both of the Port of Virginia's marine terminals in Newport News and Portsmouth already could handle operations, maintenance and service activities and would need about $10 million each to expand their manufacturing capabilities for blades, nacelles, towers and foundations.

However, other ports and shipyards would need heavier investments, depending on how specialized the industry wants their ports to be. For example, Colonna's Shipyard in Norfolk, Va., could handle different supply chain components from the Port of Virginia, according to the BVG Associates report. Upgrading its infrastructure to handle operations could cost up to $5 million, but the port would need more than $50 million to update its facilities for jacket manufacturing.

The report's recommendations and findings line up with what companies and government agencies have talked about with building up a domestic offshore wind sector. During the Virginia Offshore Wind Executive Summit in September, industry participants said Virginia has some of the tools needed, such as renewable energy-friendly policies and a maritime workforce, but more needs to be done to attract suppliers.

"Very little has been done to study and correlate the incentive plans," said Jay Borkland, a senior managing consultant for Ramboll, a global engineering and design firm. "Getting the deals done is the next peel of the onion as you look at where certain suppliers might locate."