Posted: January 22, 2010

By Michael Schwartz

michael.schwartz@insidebiz.com

Judging by the early success the newly created Virginia Offshore Wind Coalition has had in attracting support from private industry and the political world, it's clear just about everyone wants to stake a claim in the rush to develop a multibillion-dollar wind-generated energy industry off the Atlantic coast.

VOW, as it calls itself, was incorporated in Virginia Beach in late 2009 with the goal of helping Virginia, particularly Hampton Roads, to capitalize on what it believes is an opportunity to transform the region into the hub of the offshore wind industry.

"We're hopeful to become the Silicon Valley of wind for the East Coast," said Bob Matthias, assistant to the city manager of Virginia Beach.

VOW was officially unveiled to the region in a press conference on Jan. 15.

The organization is working toward obtaining nonprofit status and is headed by local lobbying and consulting firm Principle Advantage. It has quickly garnered support from big names in the local maritime industry like Earl Industries, BAE Systems and Colonna's Shipyard.

It also lists among its members, entities from the political realm including the cities of Virginia Beach and Norfolk and the Virginia Port Authority.

What entices all these organizations to come to the same table? The answer is green, both in the push for clean energy sources and the economic development potential and big-dollar investments these industries boast are just around the corner.

"We see it as a business opportunity," said Joe Harris, spokesman for the Virginia Port Authority. "As this nation begins to look at alternative energy sources, with wind being one of them, the VPA is exploring this as a possible economic development opportunity and growth area for cargo."

By partnering with industry and government, VOW is hoping to position the region not only to grease the wheels for a potential offshore wind farm, but also

to prove it's capable of being a center for manufacturing and distribution of the giant wind turbines.

The turbines, including the poles and the blades, are colossal, standing 400 feet tall, with blades reaching 100 meters across and in total weighing about 400,000 pounds each, according to Matthias.

VOW and its partners believe Hampton Roads' deep ports and existing manufacturing operations with a history of building large machines, are ideal to build the turbines and then ship them to wind farms up and down the East Coast, not limited to off the shore of Virginia.

"If the turbines, blades and all of the components that go into the assembly/construction of the units that compose these wind farms come in on ships, we'd like to make Virginia the East Coast's gateway for this cargo," Harris said.

While it has the local maritime industry, big players from the wind industry and localities on board, there remains one industry partner VOW desperately wants to land.

The most obvious beneficiary of a wind farm off the coast of Virginia, Dominion Virginia Power, is VOW's holy grail.

"We need the utility," said Ann Flandermeyer, VOW's executive director.

All electricity generated by future turbines would need to run over a transmission line from out in the ocean to the grid on land.

That's where politics comes in. And VOW's message seems already to be getting through to members of the General Assembly and Congress.

State Sen. Frank Wagner, R-Virginia Beach, hopes to bridge the gaps the wind initiatives face, including working to streamline the multi-faceted approval process from the federal level and opening the door for financial incentives that will entice private investment.

Multiple bills have been introduced by Wagner and other state politicians in the latest General Assembly session to lay the groundwork for the big push for offshore wind energy in the region by calling for the creation of a state offshore wind authority.

That body, if created, would have the power, among other things, to help secure bond-issuing power, government guarantees for loans and legislation that might persuade the state's electricity monopoly to get on board.

Wagner said Dominion has expressed an interest in developing a main transmission line over which the electricity generated by wind farms could reach the land.

Since it is likely that multiple wind farms would be built, Wagner said the private developers of those farms would have a choice to either build their own transmission lines or pay a royalty fee to a company that has the means to build with large capacity to handle the load, like Dominion.

"For Dominion to express an interest in my mind is a major change from where we were a year ago," Wagner said.

But the need for a transmission line is still a long way out.

VOW and its partners still have to prove Virginia's coast has the right conditions for ideal wind energy production.

The Virginia Coastal Energy Research Consortium has released feasibility findings that say the wind and necessary depth levels all exist off Virginia's coast. Further proof is needed, however, and that costs money.

Huge and expensive meteorological towers would have to be built and put in place off the coast to come up with concrete data to entice private investment.

"If you go out there and prove the wind is there you can go to the turbine manufacturers with a deal," Matthias said.

The proposed offshore wind authority would likely help facilitate the funding and construction of those towers, possibly through public/private partnerships.

Other bills floating around the General Assembly call for a sales tax exemption for companies involved in the wind industry.

"It's a means to incentivize," Wagner said. "The ultimate goal is to attract a manufacturer of turbines."

Other politically charged hurdles include marine life studies, obtaining land use rights in federal waters and potential interference with Department of Defense and NASA operations that take place in the nearby areas offshore.

"The significant impediments all rest inside the Beltway," Wagner said of federal restrictions.

Most involved believe time is of the essence as competition is quickly moving forward.

"Other states are further along in the process than we are," Flandermeyer said, including wind farm projects in Rhode Island, New Jersey and other states.

Those states are all enticed by the same figures.

It is projected that the East Coast offshore wind industry could become an $80 billion industry over 20 years, creating up to 20,000 new jobs, Flandermeyer said.

The potential positive environmental impact is enticing as well. A single $2.5 billion wind farm with 200 turbines would produce enough electricity for 350,000 homes, Matthias said.

With industry and political partners in place, Flandermeyer and VOW are confident the efforts will move forward.

"I don't think it's going to be that tough a sell," she said. "The momentum is growing. The legislators realize that."