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With two-plus decades of retail experience, Rachel Brown well knew her internal fraud detector should be on high alert when weighing any offer touted as “free.”
That’s why the retired quilt store owner paused — and did her homework — when a tempting overture for no-cost rooftop solar crossed the transom of her Augusta County home a year ago.
Brown’s research involved querying her utility-savvy nephew, Everett Brubaker, who assured her that Dominion Energy’s solar plan targeting elderly and low-income Virginians is indeed a legitimate deal.
“Everett would not be recommending anything that wouldn’t be good for me,” she emphasized. “It came from a very trusted source. That really mattered to me.”
Brubaker’s nod motivated his aunt to sign up for solar.
And, true to its promise, the only money she has spent — all voluntarily — was on ingredients for the chocolate caramel oatmeal cookies she baked for the SunDay Solar crew that arrived Sept. 12 to attach a 12-panel array atop her house. The 5-kilowatt system was scheduled to go online this month.
“Just the idea that this will help me move off fossil fuels is exciting,” Brown said about a system configured to cut her power bill by at least one-third.
“I know Dominion is a huge corporation and my little electric bill is nothing to them. But I’ll be saving and that’s big for someone on a fixed income.”
Brubaker, based in the nearby Shenandoah Valley city of Harrisonburg, is an outreach specialist on the Energy Solutions team at Community Housing Partners. His employer is the largest of roughly a dozen nonprofits statewide qualified to perform weatherization services.
Linking homeowners who live paycheck-to-paycheck to a suite of age- and income-qualifying programs is the bread and butter of that network. Those connections are all about enhancing affordability, adding value and ensuring residents are safe and healthy in their homes.
However, that holistic approach falls flat, Brubaker said, if he doesn’t devote time to building relationships with people who have every right to be wary of anything promoted as free.
“For my Aunt Rachel, that little 5-kilowatt system is a gamechanger,” he said. “But seniors are inundated with scams about solar so it’s nearly impossible to sift through what’s legitimate and what isn’t.
“It’s important that there be comfort and trust.”
While Brown credits Dominion’s “charitable” action, the investor-owned utility isn’t as altruistic as she might think.
The three-year program — which carries the cumbersome name, Income and Age Qualifying Solar — grew out of 2019 legislation (HB 2789) introduced by Del. Israel O’Quinn of Bristol.
O’Quinn, a Southwest Virginia Republican, called on both Dominion and Appalachian Power to craft pilot programs geared at offering energy efficiency and solar incentives to low-income and elderly customers. After it became law, utility regulators at the State Corporation Commission rolled out program rules in 2021.
Dominion and its contractors began installing the small-scale arrays last October. Thus far, they’ve served 116 households, and more are in the pipeline.
The no-hidden-fees program includes a 25-year warranty for panel maintenance and repairs.
While activating small arrays — they range from 3 kW to a maximum of 5 kW — might not be a juggernaut, Dominion’s maxim is that every kilowatt matters as the utility transitions to renewable power.
“While not the largest, they provide meaningful benefits to customers, especially in areas that may not otherwise be near a solar installation,” said Dominion spokesperson Jeremy Slayton.
The initial legislation, which covered both utilities, called for a total investment of $25 million in the solar portion.
In Dominion territory, costs for the rooftop installations are shared among all customers via a demand-side management rider, Slayton said. Briefly, those initiatives modify consumer demand for energy by deploying financial incentives and behavioral changes.
One prerequisite is that each solar installation be paired with an energy efficiency makeover, via a related Dominion endeavor, so homes are as airtight as possible beforehand.
It never pays to outfit a leaky home with photovoltaic panels, Brubaker said, adding with a laugh that homeowners must partake of their energy efficiency “vegetables” before indulging in a solar dessert.
Brown checked that box in the spring when workers from the Local Energy Alliance Program — a sibling organization to Brubaker’s CHP — conducted an energy audit on her all-electric, early 1970s home in Verona.
“They added insulation and made sure my house was sealed up,” Brown said. “The energy efficiency part really matters.”
In addition to saving money, Brown figures the panels on her roof will serve as a lesson in environmental stewardship for her 13-year-old granddaughter, Emma Rose.
“All that I do and know and share influences her,” Brown said. “So, if this can increase the percentage of renewable energy for her future, I’m all for it.”
Emma Rose bonded with her grandmother because she spent so much of her childhood at the Staunton quilt shop Brown operated with her daughter, Emma Rose’s mother, for 23 years. They opted to close the store in March 2020.
“I’m now 76 and happy to have reached that age,” Brown said, reflecting a bit on how the COVID-19 pandemic reshaped her life. “My philosophy was always to be more open, sharing and nonjudgmental. But it became more pronounced after the pandemic set in.”
While the Pennsylvania native stuck with her longtime passions of cooking, gardening and creating pottery, she also began noticing opportunities where she could grow differently.
Planet preservation became a priority — and she figured she could start by greening her energy supply.
She’s now hoping that leery friends and neighbors will be open-minded and trusting enough to follow her solar lead. They’re the doubters who repeatedly told her, “Just wait until the bill comes,” when she relayed her story about taking a chance with Dominion.
“But it never did,” Brown said. “Maybe it sounds too good to be true, but it is true. I haven’t paid a penny.”
Indiana solar installers knew their customers would be worse off when new, reduced rates for surplus solar generation took effect on July 1.
But changes being ushered in by utilities go far beyond what the industry had been bracing for, say solar and consumer advocates who are now challenging regulators’ interpretation of a 2017 law that gutted net metering.
All five of Indiana’s investor-owned utilities have won approval to not only slash the rate paid for customers’ surplus solar power, but also change how solar output is calculated in a way that drastically reduces the payments.
Utilities say they are protecting other customers from subsidizing those with solar panels, but advocates say the outcome threatens to put rooftop solar out of reach for all but the wealthiest customers.
“Unfortunately, utilities used the opportunity to completely change the policy, and [state regulators] went along with what utilities wanted,” said Ben Inskeep, program director at Citizens Action Coalition, a consumer and environmental advocacy group based in Indianapolis.
Indiana solar customers until now have been paid for extra solar generation at the end of each billing cycle. The amount of electricity sent back to the grid that month is subtracted from the amount of power the customer used from the grid, and any extra is paid out at a rate lower than the retail rate but robust enough to make solar panels financially viable for many customers.
The arrangement allows a homeowner, for example, to use extra daytime solar generation to offset evening grid power use, but they can’t bank solar credits in the summer to reduce their electric bill during the darker winter months.
A bill (SA309) signed by Gov. Eric Holcomb in 2017 put the state on a path to phasing out net metering by 2047. Meanwhile, it let utilities begin paying solar customers a lower rate when solar penetration reached 1.5% of their summer peak load, or by July 2022.
CenterPoint, previously known as Vectren, was the first utility to reach that benchmark and early last year filed a request to institute the new, lower rate — known as the “excess distribution generation” or EDG rate. CenterPoint also proposed switching from monthly net metering to a new model known as “instantaneous netting,” in which customers pay the full retail rate for all power used from the grid, and all solar power sent back to the grid is paid at the much lower EDG rate. The arrangement turns out so badly for customers that advocates like Inskeep refer to it as “no netting.”
The Indiana Utility Regulatory Commission approved CenterPoint’s full request in April 2021 despite arguments from consumer and solar advocates that the plan oversteps what’s called for in the 2017 law.
“SA309 does not authorize instantaneous netting. It made no mention of changing the netting interval,” Inskeep said.
In March 2021, NIPSCO had submitted testimony seeking an EDG tariff with monthly netting. But NIPSCO withdrew that proposal and sought instantaneous net metering after the commission’s decision on CenterPoint. Utilities AES, Indiana Michigan (I&M) Power, and Duke Energy also sought the same instantaneous netting arrangement. The commission approved all of the proposals — most recently Duke’s on July 6.
The Office of Utility Consumer Counsel, a governmental office set up to advocate for consumers, joined solar advocates in arguing against instantaneous netting, saying it would be inconsistent with SA309.
But the commission has argued, including in its Jan. 26 approval of I&M’s proposal, that the intent of SA309 was to end net metering, and instantaneous netting would basically be a way to do that. The commission acknowledged that customers would save less money through instantaneous netting, but invoked an argument long used by utilities against solar energy: that the savings of customers with solar would be costs shifted onto customers who don’t have solar.
Duke Energy echoed this sentiment in response to Energy News Network questions about the change to instantaneous netting.
“The intent of the legislation is to help ensure that customers who do not own solar generation are not subsidizing those who do,” said Duke spokesperson Angeline Protegere, noting that 2,600 customers in Duke’s Indiana service territory have solar.
“Even though they generate some of their own power, solar customers still rely on electric infrastructure such as power lines, and the new rate reflects the costs of that. It’s important to realize that customers ultimately pay for the credits we give to solar customers.”
Advocates including the Indiana Distributed Generation Alliance and Citizens Action Coalition appealed the commission’s decision on CenterPoint’s proposal and won a favorable ruling in the Indiana Court of Appeals.
But now the matter is before the state Supreme Court, and the appeals court decision is negated until the higher court hears the case, with oral arguments scheduled to start Sept. 15.
“This is a matter of law,” said Laura Arnold, executive director of the Indiana Distributed Generation Alliance. “The commission and CenterPoint have been trying to portray that the General Assembly intended to allow instantaneous netting, but that is just not true.”
Under SA309, the EDG rate paid for energy from solar is equivalent to 125% of the average hourly market rate during that month. Using this calculation, CenterPoint originally proposed to pay their customers 3.1 cents per kilowatt-hour for solar, and NIPSCO proposed 2.6 cents.
Utilities have increased the prices they plan to pay customers for solar as market power prices have risen due to the war in Ukraine, to the 4 to 5 cents per kilowatt-hour range; meanwhile retail prices customers pay for power from the grid have also risen. Duke’s retail rate is 16 cents per kilowatt hour for an average residential customer, Protegere said. (CenterPoint and NIPSCO did not respond to requests for comment.)
Brad Morton, founder and CEO of Morton Solar, told the commission that the switch to instantaneous netting and EDG rates “grossly lengthens the customer investment pay-back period,” with instantaneous netting at the 3.1 cents per kilowatt-hour originally proposed by CenterPoint changing the typical residential solar payback period from the current 7- to-10 years to 21 years.
The 3.1-cent payment rate alone, without instantaneous netting, would result in a typical payback period of 14 years, he testified. When the phaseout of the federal Investment Tax Credit is added to instantaneous netting and the EDG, it would take 25 years for a typical solar system to break even, Morton said.
Morton was the first to install solar in Vectren (now CenterPoint Energy) territory, he told the commission, and among the first to do grid-tied solar in Indiana. His family members had worked in Indiana’s coal mines, and he wants to help transform former coal mine land into solar fields, replacing declining coal mining jobs and revenue with a solar economy in the process.
Last year Morton did $2.5 million worth of solar installations in Vectren’s service area, and $3.1 million in Indiana as a whole. If the instantaneous net metering goes forth, he said he might have to stop doing business in Indiana altogether, and lay off some of his 17 staff members.
“This will be devastating to Indiana’s fledgling solar industry and result in job losses and probable market contraction to an industry that was just beginning to blossom,” he testified.
Customers who have recently installed solar are exempted for a decade, governed by the old terms through 2032. But that just barely covers a typical pay-back period, so right when customers would have hoped to start reaping the savings of solar, the opportunity will stagnate. Customers — like Arnold herself — who installed solar before SA309, can net meter under previous terms until 2047.
Arnold said that if utilities get their way and institute EDG plus instantaneous metering, solar would only make sense for most customers if they have a battery system to use all their energy themselves rather than sending it back to the grid for pennies. But batteries cost thousands of dollars and make the already slim margins on solar unworkable for many customers.
She noted that if “no netting” takes effect, customers would rarely install solar systems that generate more power than they need at any given time, wasting the chance to get more clean power on the grid by installing larger systems.
Arnold added that on top of the gloom facing the solar industry for years to come, there is debilitating uncertainty for customers who’ve signed solar contracts and hoped to install them by the end of the year. Duke Energy and NIPSCO have told customers they could qualify for previous net metering terms if their solar is contracted now and installed by the end of 2022. Protegere confirmed that is Duke’s plan.
But Arnold said solar developers and lenders are worried that the commission might block this arrangement, perhaps if another utility complains.
Arnold said that months ago, advocates had asked the commission to issue an opinion clarifying the deadline, to provide certainty for developers and customers, but the commission has not done so.
Inskeep noted that the changing price of power — and hence the 125% EDG rate people are paid for solar sent back to the grid — means uncertainty for anyone who is considering solar.
“It’s hard to say what your compensation will be in the future — it will change every single year,” said Inskeep, who was principal energy policy analyst at EQ Research, a clean energy consulting firm, at the time the commission decisions were playing out.
“You’re making a 25-year investment, but the value is updated on an annual basis. You have no ability to see if your investment will pay off. Utilities never make large investments for 30-year assets without having certainty for that cost recovery. Now they’re asking residential customers to take that risk — with no ability to understand when their investment will pay off or if it will never pay off.”
Elizabeth City, North Carolina, once sought to lure boaters up the Pasquotank River with free docking at its marina and welcome baskets of wine, cheese and roses.
Today, the “harbor of hospitality” is preparing a new pitch, trying to attract offshore wind manufacturers with the region’s workforce and manufacturing capacity.
“Northeastern North Carolina is a special place,” commerce secretary Machelle Sanders said at a recent summit hosted by the historically Black Elizabeth City State University. “Just as North Carolina has provided a runway for the Wright Brothers to take flight, the region is helping to develop clean energy.”
With two offshore wind farms underway off the Outer Banks and a major turbine blade facility announced just across the state border, the potential in this largely impoverished region is vast. But experts and advocates stress that extreme poverty and economic disparity won’t be erased without effort.
“We have to be strategic about it, to make sure that the communities that really, really need this are benefiting from it,” said Montravias King, an Elizabeth City State graduate and former city councilor. “And if we don’t, it’s not going to happen.”
Regional pride ran high at the conference, with Sanders, a native of tiny Belhaven on the Pungo River, delivering the keynote address. Citing the area’s ties to the Coast Guard and its tourism industry, she declared, “we do have assets in this great part of the state.”
But in many ways, northeastern North Carolina is a tale of two banks. On the Atlantic Ocean, there’s the overwhelmingly White Outer Banks, once a string of modest fishing villages that today is a multibillion-dollar tourist attraction. Dare and Currituck, the two counties that encompass most of these barrier islands, are some of the state’s wealthiest by income and property value. In the last decade, Currituck’s population grew by 19%, not far behind the Triangle and Charlotte.
Then there are the roughly 20 counties of the mainland, sometimes dubbed the “Inner Banks” by tourism promoters. With few exceptions, these communities have a higher portion of Black people than the state overall. In Bertie County, where the Chowan River empties into the Albemarle Sound, nearly two-thirds of the population is Black, the highest fraction in the state.
People of color were systematically shut out of the region’s economic opportunities for centuries, and in recent decades, textile manufacturing jobs were lost to the North American Free Trade Agreement. Today, populations here are shrinking at the fastest rates in the state, and the economic indicators rank these counties among the poorest. Property values in Dare are four and a half times that of Pasquotank County, home to Elizabeth City.
Many feel little connection to the Outer Banks, said King, who now directs clean energy campaigns for the North Carolina League of Conservation Voters in Raleigh. “It’s a different world out there.”
In her address, Sanders acknowledged these inland counties — and other rural areas of the state — had often been left behind economically, a dynamic she knows well. “I know very well what it’s like to be excluded,” she said, “because I’m Black. I’m a woman, and because I’m from Belhaven.”
But she and others at the conference said the entire region could benefit from offshore wind. In March, a report commissioned by her department found the industry was poised to invest $140 billion up and down the East Coast — manufacturing specialized wind turbine components, shipping and assembling them at sea. “We do deserve our fair share of that,” she said. “We are looking forward to that blossoming economy.”
Already, there’s economic activity underway in northeastern North Carolina because of two major offshore wind projects. Twenty-seven miles east of Virginia Beach, a Dominion Energy project is scheduled to begin delivering power in 2026. With a capacity of 2.6 gigawatts, the wind farm could create enough power for nearly 700,000 homes.
Avangrid Renewables plans a similarly sized project off the North Carolina coast, Kitty Hawk Offshore, slated for completion in 2030. (Larry Lombardi, the economic development director for Currituck County, says the wind farm is actually closer to his town, despite the name. “I have to clarify so people understand,” he told the Energy News Network, “it’s 27 miles off the coast of Corolla.”)
Power from both projects will come onshore to Virginia, and they’ll be built and staged in that state’s Tidewater region. Together, they’re expected to create upwards of 1,700 construction-related jobs annually. Once the wind farms are up and running, they’ll spur another 2,000 jobs for technicians, vessel managers, and other operations and maintenance workers.
Most of these jobs will be in Virginia, but within reach of Tar Heels across the border, many of whom already commute north for work. In Gates County, more than half of the employed work out of state, according to commerce officials.
Situated carefully beyond the coastal horizon, the Kitty Hawk wind turbines aren’t expected to be visible to beachgoers. But even if they were, Lombardi and others believe they could be a boost, not a bane to tourism.
“We know from the offshore wind in Europe,” he said, “they have tourism boats going out there. They have fishing boats going out there. It’s just going to add to what we’re already doing.”
These two wind farms could be just the tip of the iceberg. According to the March report, 41 gigawatts of offshore wind could be installed up and down the Eastern seaboard by 2035. Gov. Roy Cooper, a Democrat in his second term, wants a fifth of that to be off North Carolina’s coast.
With today’s technology — in which one turbine has about 6 megawatts of power capacity — those figures translate to more than 1,000 turbines off the state’s coast alone, with another 5,500 or so off the rest of the East Coast.
The structures require specialized parts, like towers 30 stories high, blades the length of football fields, and nacelles that would dwarf most office buildings. Today, all these components are made in Europe — creating an unprecedented opening for suppliers in North Carolina.
“There’s nothing else like this where you have a multibillion-dollar global industry that has zero footprint in the United States,” said Steve Kalland, the director of the North Carolina Clean Energy Technology Center and contributor to the March study. “It’s wild.”
Even when the ocean-based turbines reach the end of their useful lives, they’re likely to be refitted with the latest technology and reused. Manufacturers will need a steady workforce for decades to come. “It’s a multigenerational opportunity,” said Kalland. “We’re not just going to build wind turbines for five years and then everybody’s unemployed.”
Though the Northeast states are ahead of the Southeast ones when it comes to establishing a market for offshore wind — requiring some 20 gigawatts of the resource by 2035 — there’s still ample chance for North Carolina and its neighbors to play a leading role in the supply chain.
That’s part of why Cooper joined the governors of Maryland and Virginia last year in an agreement to work cooperatively to boost the region’s participation in the offshore wind supply chain — including through workforce training, enhancing deepwater ports, and upfitting and expanding factories.
It’s already paying off. Last month, Siemens Gamesa announced it would build the country’s first offshore wind turbine blade facility in Portsmouth, Virginia, creating an estimated 300 direct jobs.
The factory is expected to supply the entire East Coast, but another major blade maker in North Carolina is not out of the question, Kalland said. And there’s still potential for other major factories to produce towers, foundations, undersea cables, nacelles and more.
“All of these things are going to have to get sourced out here in some way, shape or form,” he said. “We really think that the opportunity for job creation — as you work your way through the parts and pieces — is huge.”
That’s especially true because North Carolina’s manufacturing sector is already the largest of the East Coast states, and many companies here already produce onshore wind turbine components. More than 40 have already expressed interest in participating in the offshore wind supply chain.
At Wilmington, Morehead City, and Southport, the state also has opportunities to enhance its ports to assemble and ship large offshore wind components. Radio Island, between Morehead City and Beaufort, is considered the best near-term option.
Jeff Andreini, the vice president of new energy for Crowley Marine Services, glowed about the site at the Elizabeth City State conference. “Radio Island is a tremendous opportunity,” he said. “It’s a direct shot out to the Atlantic Ocean.”
Andreini, whose company has a network of barges that can deliver offshore wind components to the point of construction, isn’t the only one excited about the spot, said Jaime Simmons, program manager for the Southeastern Wind Coalition. “The county commission and the economic development office are thrilled about it,” she told the Energy News Network.
And though North Carolina is a so-called right-to-work state, which allows workers to be represented by unions without having to pay dues, the state AFL-CIO is still hopeful that offshore wind could help inject more union jobs into the state’s economy. “It’s so early and it’s so new,” said Aiden Graham, campaign manager for the group, “that nothing is set in stone.”
To be sure, not all of these supply chain opportunities are in the state’s northeast corner, and it’s not the only area struggling economically. But experts and locals point to evidence that the region could get a significant boost from the industry.
First, there’s the spillover effect from Virginia. “There is a significant workforce opportunity, even if a lot of this manufacturing and construction work happens in the Hampton Roads area,” Kalland said. “There’s not enough specialized people in Hampton Roads — they’re going to be drawing people from all over the place, and northeastern North Carolina is clearly one of those places.”
Second, there’s the presence of “anchor companies,” which provide direct jobs in manufacturing major components and open the door to industries further down the supply chain. Of the five existing potential anchor companies listed in the March report, three have a major presence in northeastern North Carolina.
One is Avangrid, which also operates the state’s only land-based wind farm, just outside of Elizabeth City. Based in Virginia Beach, Ashley McLeod directs stakeholder engagement for the company’s Kitty Hawk project. At the conference, she stressed its expected boon: a $2 billion economic impact.
At the same time, the former school board member sought to assure the audience her company would protect the natural environment during siting and construction. “We’re making sure we’re doing it in the most responsible way,” she said.
Another potential anchor in the area is L.S. Cables, a New Jersey company with a facility in Tarboro, just east of Rocky Mount in Edgecombe County, the most economically distressed in the state.
The company already supplies onshore wind and solar projects in the United States, according to the March report, and the Tarboro factory could, “possibly with some modifications, play a key role to support the ocean cable needs” of offshore wind.
Perhaps most promising is Nucor Steel, the largest U.S. steel producer in the country, with headquarters in Charlotte and a sizable facility in Hertford County.
“They very much want to be part of constructing the towers,” said Amy Braswell, the economic development director of Ahoskie, the county’s largest town, population 4,659. The interest is already having a ripple effect. “We’re contacted by people who want to be in proximity to Nucor,” she said, “to work with them.”
The county’s economy could undoubtedly use more than a ripple. The 10th most economically distressed in the state, it has a median household income of $38,000 and an unemployment rate of over 6%.
“I think it’s going to be a boon for eastern North Carolina and eastern Virginia,” said Braswell of the offshore wind industry. “It’s going to be a boon for the citizens who are going to get really good jobs.”
The area’s numerous rivers and sounds could serve to transport large components by barge up to Virginia ports and down to North Carolina ones. The area also has a network of railroads and highways that ease transport.
“We are not as susceptible to storm damages and things that you have to worry about closer to the coast — yet we are an hour from anything,” Braswell said. “We think we’re ideally situated for it.”
Still, these economic opportunities could be limited if North Carolina misses its offshore wind targets set by Cooper — not an impossibility.
While the federal government is moving forward on a lease area 17 miles off the state’s southernmost shores, it will have to overcome opposition from over half a dozen local governments who oppose any turbines beachgoers might glimpse from the sand.
At the same time, a Trump-era ban on offshore wind, set to take effect next July, must be lifted by Congress for any other wind energy areas off North Carolina’s coast to come to fruition. The Build Back Better bill contains language that would do just that, but its fate is still uncertain.
Fulfilling Cooper’s targets will almost certainly require additional state-level legislation, said Simmons. Even with a new law requiring a 70% reduction in Duke Energy power plant pollution by 2030, the state probably needs specific mandates for offshore wind to draw development off its coast and supply chain jobs with it.
“This is such a new industry that we’re bound to get part of it,” she said, “but it will require a designated effort for North Carolina to capture what we know is economically possible.”
While the AFL-CIO is optimistic about the possibilities for union jobs, those odds increase if federal or state policymakers tie green energy incentives to the opportunity to be in a union.
“We can remake the economy to benefit working people and the planet and to grow the labor movement,” Graham said, “but it’s not a foregone conclusion.”
The degree to which northeastern North Carolina benefits economically from offshore wind will also depend on how well prepared residents are to work in the industry. That’s why boosters say training programs at community colleges and at historically Black universities such as Elizabeth City State are critical.
“Education is important,” King said. “Don’t bring in people from outside — we want to see those dollars flow in our communities.”
The Cooper administration has already dipped its toes into these waters, working with Halifax County schools to create a pilot program for 20 high school students to work in solar and wind energy and earn course credit toward a bachelor’s degree.
“The Governor’s Office and other partners are working to expand this program to include additional school systems, companies and industries — including offshore wind,” spokesperson Jordan Monaghan told the Energy News Network in an email.
King, who with Simmons and other clean energy groups is part of a new coalition to promote offshore wind, remains cautiously optimistic.
“We’re on the cusp of a clean energy revolution,” he said. “We have the opportunity to produce some real, high-earning jobs for people, that can change people’s lives. But it doesn’t happen overnight — you have to prepare people for it.”
Shipbuilders in the port city of Brownsville, Texas, are nearing the halfway mark on shaping 14,000 tons of steel into a vessel designed to ensure the country’s gamble on offshore wind is less dicey.
Meanwhile, 1,676 miles east in Virginia, executives with Richmond-based Dominion Energy who ordered the ship have their fingers crossed.
They are hopeful home-state regulators will greenlight a request by their subsidiary, Dominion Energy Virginia, to deploy the $500 million colossus to “plant” the country’s hugest — and Virginia’s first — full-scale commercial offshore wind farm beginning in summer 2025.
Dominion has dubbed its hulk Charybdis, after the daunting sea monster of Greek mythology. Eventually, the brawny, 472-foot-long vessel will be equipped with sturdy “legs” that stabilize it on the seafloor and a main crane capable of toting 2,200 tons — the equivalent of 4,400 grand pianos.
The looming challenge of efficiently securing 176 mega-turbines to the ocean floor off the coast of Virginia Beach is what prompted the parent company to dip its corporate toe into ship construction.
After enduring a convoluted but ultimately successful process to install its precursor two-turbine pilot project in 2020, Dominion decision-makers are confident that investing in the nation’s first specialized installation vessel is wise — and potentially lucrative.
“The pilot helped educate us,” said Charlotte McAfee, director of construction projects at Dominion who has guided progress on Charybdis since early October. “It showed us that this commercial project is really best managed with a vessel with a U.S. flag.”
Even if the State Corporation Commission nixes the utility’s proposal for Charybdis to install what’s known as the Coastal Virginia Offshore Wind (CVOW) project, Dominion doesn’t expect the giant expensive ship to sit idle.
In fact, it is already chartered to handle turbine installation duties for two separate offshore wind projects in the Northeast slated to be completed before Dominion’s 2,640-megawatt farm.
As well, Dominion figures Charybdis can continue to be a workhorse as the Biden administration has set a goal of reaching 30 gigawatts of wind power by 2030 along the Atlantic and Gulf coasts and in Pacific waters.
“Dominion has really been pioneering on this front,” McAfee said. “I’m proud to be part of it.
“We’ll find good uses for the vessel whether we’re permitted to use it for CVOW or not. The market is ready for the whole United States and this is the best way to install renewable energy.”
One monumental hurdle to harvesting the ample wind along U.S. coastlines is the lack of homegrown industries that craft the foundations, blades, nacelles (which house the generating parts) and other distinctive components fitted together to create the sophisticated turbines. Now, they withstand lengthy and expensive journeys from Europe, where the industry has matured.
Another key obstacle is the obscure Merchant Marine Act of 1920. Known as the Jones Act, it shields domestic shipbuilding enterprises by restricting water transportation of cargo between U.S. ports to American-built and -owned vessels crewed by U.S. citizens.
Charybdis represents Dominion’s commitment to advancing American offshore wind out of its longtime infancy.
Offshore wind is crucial if the investor-owned utility’s portfolio is expected to achieve 100% carbon-free electricity generation by 2045, as required by the 2020 Virginia Clean Economy Act. The utility is also intent on reaching net-zero carbon dioxide and methane emissions goals by 2050.
The Coastal Virginia Offshore Wind project, scheduled to go online in 2026, will power the equivalent of 660,000 homes.
Karl Humberson, a marine engineer hired by Dominion in 2011, oversaw progress on Charybdis before McAfee inherited those duties. He is responsible for the installation and construction of the wind farm.
Four years ago, the company tasked Humberson with exploring potential turbine installation solutions. In May 2020, Dominion announced it was leading a consortium to build a Jones Act-compliant vessel. By autumn, the company had contracted with the global firm KeppelAmFELS to build Charybdis in Texas.
Humberson is aware insiders and outsiders are curious why an energy company took the initial plunge on a vessel that might not even ply Virginia’s coast.
“Let’s take a couple of steps back and look at CVOW,” Humberson said. “The idea is that this is something necessary and aligns with Dominion’s renewable energy and sustainability goals.”
Investing in a “purposeful vessel,” he said, is a boon for all U.S. players intent on advancing wind.
“If you want to be successful, you want to have the right tools,” Humberson said. “What we’re saying is to expand the industry, here’s the only right way we know to do it right now.”
Assembling and installing the pilot — a pair of 6-megawatt turbines in federal waters adjacent to the larger wind farm — was a logistical headache due to lack of a Jones Act-compliant ship.
First, the components manufactured in Europe made a transatlantic journey on a cargo ship, the Bigroll Beaufort, which docked in Halifax, Nova Scotia.
There, the foundations were offloaded onto an installation vessel, the Vole-au-vent, and transported to the construction site off the coast of Virginia. Then, that same vessel completed a second trip from Canada with the turbine components on board.
“This time, we’ll have 176 turbines, not two, so coming down from Canada would not make a lot of sense,” Humberson said.
Without Charybdis in the picture, an alternative method is to put the components on a barge and transfer them to an onsite European vessel that could serve as the installation base.
“Using a barge and tugboat means double-handling everything,” Humberson said, emphasizing that turbine blades are fragile. “If you need to move this equipment, you want to do it once and you want to get it right.”
One of Charybdis’s benefits is providing an extremely stable work platform whether seas are calm or choppy, he said.
The height and weight of components are serious considerations. For instance, blades for the pilot project measure 253 feet. The monopile foundations are 220 feet long and weigh 1,000 tons apiece.
Those measurements are diminutive when compared to the heavy lifts in store with the commercial project. For instance, the turbines — the largest available — have a capacity up to 14.7 MW. Just one of those turbines has more generating capacity than the entire pilot project.
A blade alone measures 354 feet — longer than a football field. And just the visible part of each turbine is skyscraper height, stretching a soaring 800 feet from the top of the ocean to the tip of a blade pointed straight up.
David McFarland, Dominion’s director of investor relations, knows $500 million is a whopping price tag for anything, never mind a unique Jones Act-compliant ship.
“What Dominion Energy is doing is showing confidence in the offshore wind industry” and opportunities for it to thrive domestically, McFarland said.
The question he fields most often: Who is footing that bill?
It’s not ratepayers — at least not directly. Instead, the ship is being built for the mammoth parent company that owns multiple subsidiaries nationwide, including Dominion Energy Virginia.
The majority of capital for funding Charybdis is being borrowed from third parties and banks, McFarland explained, adding that “making payments to banks is a shareholder expense, not something passed on to a utility customer.”
Leasing out Charybdis to other coastal wind projects allows the parent company to reap a return — somewhat indirectly — on that $500 million investment.
For instance, Dominion Energy Virginia has folded the cost of leasing — not building — Charybdis into its request before state utility regulators seeking the go-ahead for the entire $9.8 billion wind farm project.
“That lease is included in the cost of [the wind farm’s] construction,” McFarland said. “It’s spent on behalf of customers and is expected to be recovered from customers. Dominion Energy Virginia is looking to recoup that money.”
He is convinced Charybdis is a boon for the company’s utility customers.
“They’re better off with this vessel, because otherwise the cost [of turbine installation] would be higher,” McFarland said. “You do want the best solution for customers.”
Charybdis is on track to be completed on schedule by December 2023, McAfee said.
Thus far, Ørsted and its joint venture partner Eversource, are the first to book Charybdis for its Revolution and Sunrise wind projects. Their construction and operations plans are undergoing environmental review now.
Revolution is a 704-megawatt project designed to serve customers in Connecticut and Rhode Island, while Sunrise will provide electricity to New Yorkers. Both are expected to be operating by 2025.
Ørsted, a global leader in the wind industry, has also partnered with Dominion on both of its wind projects.
Dominion said it was unable to provide figures for the daily rental fee required because those numbers are “competitively sensitive.”
Willett Kempton, a professor at the University of Delaware who is a nationally renowned expert on offshore wind power, said wind developers negotiate those fees with Dominion.
Kempton said in an interview that he had heard from industry sources that those daily rates could be as high as $500,000, but didn’t know how accurate that number will turn out to be.
The daily fee for using a non-U.S.-made installation vessel is likely close to $250,000, he said.
While $500 million is a hefty sum to invest in a vessel with Charybdis’ capabilities, Kempton said somebody had to go first seeing as “this is the only way the industry knows how to do installations.” One such installation ship likely won’t be enough if the U.S. wind industry booms as expected, he added.
Companies without access to Charybdis or a similar vessel will likely resort to a feeder barge system as a stopgap solution to keep their wind projects on schedule, he said.
The Department of the Interior’s Bureau of Ocean Energy Management has approved construction and operations plans for two other offshore projects: 800-megawatt Vineyard Wind in Massachusetts and 130-megawatt Southfork Wind in New York.
By 2025, the agency has vowed to advance new lease sales and complete review of at least 16 construction and operations plans, which represent more than 19 GW of renewable energy.
Charybdis will be based in Hampton Roads and staffed with U.S. crews. It’s one enormous piece of Virginia’s attempt to transform its existing regional advantages — a robust maritime workforce and a port in Norfolk with deep water and no height restrictions — into a supply chain hub.
“The supply chain is in Europe,” Humberson said. “There’s a lot of talk about building it up in this country, but it’s not here yet.”
As evidence, he pointed to Germany, Denmark, Finland and Italy as sources for turbine components and affiliated infrastructure. Most of it is destined for a 72-acre site at the Portsmouth Marine Terminal. That space will serve as a staging and pre-assembly area, courtesy of a 10-year lease with the Virginia Port Authority.
The terminal also will house a blade-finishing factory operated by Siemens Gamesa Renewable Energy, the company contracted to deliver the 176 CVOW turbines. That work entails sanding and adding protective coatings to the prebuilt blades.
Beginning in 2024, while Charybdis is readying for the two wind projects in the Northeast, Dominion plans to begin driving turbine foundation monopiles into the ocean bed at the 112,800-acre CVOW lease area. The site begins 27 miles offshore and extends 15 more miles out into the Atlantic.
The largest of those 176 steel monopiles, manufactured in Germany by EEW Special Pipe Constructions, is 268 feet long and weighs 1,755 tons. Into 2025, a separate company will transport, position and secure those foundations without the aid of Charybdis.
To protect the North American right whale, the window for that underwater chore is between May 1 and Oct. 31, per National Oceanic and Atmospheric Administration regulations.
When Dominion’s McAfee graduated from law school at Washington & Lee University in 2004, she figured pumps and suits would dominate her career wardrobe.
That changed after the young attorney was hired by the utility a decade ago. Eventually, she began amassing steel-toed boots as she pivoted to electric transmission and distribution projects.
Those boots are again serving her well for her regularly scheduled trips from Richmond to the Brownsville shipyard to monitor Charybdis’ progress.
“It’s not like I’m inspecting the welds, but I’m getting a sense of what I need to be coordinating at the shipyard,” she said. “In-person visits keep the communications open and candid.”
Devotees of Homer’s ancient and epic poem “The Odyssey” know that the mega-ship’s ferocious namesake lurked in a narrow passage between the island of Sicily and the toe of Italy’s boot. The monster was reputed to swallow the sea three times daily, causing a whirlpool that thwarted the protagonist as he sailed home from the Trojan War.
Part of McAfee’s job is ensuring that this version of Charybdis doesn’t wreak any such havoc before it’s ocean-bound.
So far, so good, despite two challenges. One was covering for her lack of maritime experience by burrowing into volumes about shipping. And the other was navigating an immense undertaking in the thick of a pandemic.“As far as the construction goes, Charybdis is a teenager now,” she said. “It’s just an honor to be involved. Once we’re finished, it will be ready to self-propel to Hampton Roads.”
As Maine comes close to finalizing its roadmap for the development of offshore wind, a coalition of labor and environmental groups is asking the state to strengthen its commitment to supporting union jobs in the burgeoning industry.
A group of 12 environmental and labor organizations has sent a letter to the Maine Offshore Wind Roadmap Advisory Committee asking that the final plan, expected by early February, incorporate explicit language recommending the use of project labor agreements and labor peace agreements as the offshore wind sector develops in Maine. Many of the same advocates are supporting a bill, announced by Democratic state Sen. Mark Lawrence last month, that would require union labor agreements on offshore wind projects.
“Organized labor needs to be a crucial part of this investment,” said Kelt Wilska, energy justice manager for Maine Conservation Voters. “And we need to make sure working families, both coastal and inland, benefit from this.”
As states from New England down to North Carolina work on their own plans for implementing offshore wind projects, Maine is expected to be a major player in the growing industry. With strong, consistent winds, the Gulf of Maine is widely considered to be one of the most promising areas for offshore wind development.
Maine convened its Offshore Wind Roadmap Advisory Committee in July 2021 with the mission of creating an economic development plan for the fast-emerging industry. The panel — which includes 25 members representing state and municipal governments, private business, community and environmental nonprofits, and organized labor — released its draft plan in early December.
The document outlines strategies for investing in infrastructure and workforce development; reducing costs and increasing resilience through renewable power; advancing Maine-based innovation; and protecting and supporting the seafood industry, coastal communities and the ocean ecosystem. Labor and environmental groups have praised much of the plan, particularly its focus on comprehensive planning, workforce and supply chain investment, and environmental monitoring and mitigation.
The draft roadmap, however, mentions unions and organized labor just three times, and not with any detail — an omission that some find problematic. It is essential that offshore wind jobs offer fair wages and benefits, as well as industry training and plans for worker safety, said Francis Eanes, executive director of the Maine Labor Climate Council, one of the groups that signed on to the letter to the roadmap committee.
“All those things are most effectively accomplished when workers can come together with each other in the form of a union,” he said. “It’s not rocket science here.”
Specifically, the letter’s signatories would like to see the roadmap call for the use of project labor agreements and labor peace agreements. Project labor agreements are pre-hire collective bargaining agreements that set the terms and conditions for the temporary employment of workers on a given construction project. A labor peace agreement is an arrangement in which an employer agrees to remain neutral should its permanent workers choose to form or join a union.
Robust union participation is the best way to make sure the economic benefits of the offshore wind industry are shared with working families, supporters argue. And, they say, project labor and labor peace agreements are the best way to ensure union labor is used in the construction, operation, maintenance, and supply of offshore wind. But the current roadmap language doesn’t reflect this urgency, said Jason Shedlock, regional organizer with the Laborers’ International Union and president of the Maine State Building and Construction Trades Council.
Representatives from the state’s energy office declined to comment as the roadmap development process is still ongoing. However, documents distributed to participants in a January 18 meeting of the committee noted that, “This is an all hands on deck moment — labor will be key, as will other actors — we don’t want to send signals of people being excluded.” The materials also indicated that the committee would possibly add to the roadmap a description of project labor agreements as an example of the kind of arrangement the state is looking for, but without going so far as to recommend or mandate these agreements.
“There is more wiggle room than we’d like,” Shedlock said.
The roadmap is already informing offshore wind legislation: Lawrence’s bill was heavily influenced by the recommendations in the draft document. The bill goes further than the roadmap on labor as it requires project labor agreements, but has a long way to go to become law. Advocates want the roadmap to call for similarly strong measures.
Using non-union contractors would prevent Maine residents from taking full advantage of the opportunities provided by offshore wind, Shedlock said. To meet the needs of such large projects, smaller, non-union companies would inevitably need to bring in temporary, out-of-state workers — workers who would then head home, contributing little to Maine’s long-term economic development, he said. Unions, on the other hand, have the resources and structures in place to recruit and train a substantial in-state workforce, he said.
“These are the partnerships we have in place,” Shedlock said. “This is the capacity that we bring.”
Formal union agreements have emerged as a significant feature of offshore wind projects. In Massachusetts, in 2021, the Vineyard Wind project signed a project labor agreement committing to use exclusively union labor. In May 2022, major offshore wind developer Ørsted announced an agreement to use American union labor to build all of its U.S. wind projects.
It would be a mistake for Maine not to follow this precedent, especially given the pressing nature of the climate crisis, Shedlock said.
“For Maine to think that they can do it differently than everyone else is only going to waste time,” he said.
Though these commitments have been widely hailed, not everyone is sure they are good for equity and diversity. When Vineyard Wind announced its project labor agreement, for example, some workforce diversity advocates declared the commitment would work against the goals of nurturing diversity and inclusion in the industry. Organized labor has a history of racial exclusion, they noted, and the majority of small construction businesses owned by people of color are non-union and would therefore be shut out of opportunities.
Labor advocates in Maine acknowledge this history, but say they are working hard to build opportunities for a diverse range of Mainers. The Maine Labor Climate Council has partnered with the Maine AFL-CIO to create a pre-apprenticeship program that will actively seek out participants from underrepresented groups. The program will help recruit and prepare potential workers for taking on an apprenticeship in the trades by teaching them soft skills and familiarizing them with unions. To help potential students overcome barriers to participation, stipends will be available to help pay for child care or transportation.
“It’s a model that is a really successful approach for bringing people currently and historically underrepresented into the union apprenticeship programs that we know lead to high-quality, stable careers,” Eanes said.
Advocates will now have to wait to see what language is included in the final version of the roadmap. Regardless of what emerges, however, they are committed to pushing the state to commit to organized labor in the long run.
“We really have one opportunity to get this right,” Shedlock said. “If we don’t employ local labor with good, family-sustaining jobs, that’s an unforced error right from the beginning.”
“As we mature towards the final investment decision, if the walk-away scenario is the economical, rational decision for us, then this remains a real scenario for us as an alternative to actually taking the final investment decision,” Chief Executive Mads Nipper said on an Aug. 30 call with investors.
Orsted shares fell 25% in the wake of the news.
Now, a top credit rating agency has cast further doubt on the company’s financial future. Moody’s Investors Service downgraded its outlook for Orsted from “stable” to “negative,” according to a Sept. 5 report.
“Whereas the impairments don’t change the company’s [earnings] guidance or expected investment levels in 2023, Moody’s expects the headwinds that Orsted is currently facing in the US to lead to its credit metrics being weakly positioned at least until the end of 2025,” the credit rating agency stated in its report.
Moody’s affirmed Orsted’s existing bond and credit ratings, but also warned of “downward pressure” on its future ratings if delays and cost overruns worsen.
Stephanie Francoeur, a spokesperson for Orsted, pointed to the affirmation of existing credit ratings, rather than the outlook downgrade, in an email on Friday.
“Ørsted is rated by the three rating agencies, Moody’s, Standard & Poor’s, and Fitch, and all three rating agencies have confirmed our current rating,” Francoeur said. “We note that Moody’s continues to have confidence in our commitment to our current rating, and we’ll ensure that we deliver on our financial plan to provide Moody’s the comfort needed to continue its confirmation of our current rating.”
Orsted is hardly the first offshore wind developer to run into economic headwinds. In neighboring Massachusetts, two companies – SouthCoast Wind Energy LLC and Avangrid Renewables – have canceled their power supply agreements with utility companies, saying the existing payments are too low given increases in their expenses.
Orsted insisted as recently as June that it had no plans to renege on its electricity agreements with Rhode Island. The existing, 2019 agreement inked with the-utility operator National Grid gives the developer 9.84 cents per kilowatt-hour for 400-megawatts of electricity from the offshore wind facility over the entire 20-year contract. National Grid in turn would earn $4.6 million in renewable energy credits sold from the project.
In its August announcement, Orsted executives pledged to secure final investments in its projects, including Revolution Wind, no later than early 2024.
“The US offshore wind market remains attractive in the long term,” David Hardy, executive vice president and CEO of Region Americas at Ørsted, said in a statement. “We will continue to work with our stakeholders to explore all options to improve our near-term projects.”
State officials, including Gov. Dan McKee, have repeatedly stressed the importance of the offshore wind industry to the state economy, creating jobs and boosting state GDP.
Olivia DaRocha, a spokesperson for McKee’s office, said in an email Friday that Orsted assured the state of its commitment to the Revolution Wind project despite its recently announced financial woes.
“The company communicated that there are no direct impacts on the RI Revolution wind project and associated work, which is scheduled to start over the next several months,” DaRocha said.
DaRocha referred additional questions to Orsted.
Onshore construction work related to the 700-megawatt Revolution Wind project has already begun, with construction offshore expected to ramp up in 2024 ahead of a 2025 operational date, the company said previously. The 65-turbine wind farm planned off Block Island’s coastline has already secured approval from state coastal regulators, as well as a final environmental assessment from the U.S. Bureau of Ocean Energy Management.
In preparation for Revolution Wind and other projects in nearby waters, Orsted has committed $40 million into infrastructure investments at Quonset and Providence ports, including a wind turbine manufacturing facility at ProvPort. It has also partnered with local shipyards to build crew transfer vessels and invested $1 million into a training program for industry workers at Community College of Rhode Island.
Reprinted from E&E News with permission from POLITICO, LLC. Copyright 2023. E&E News provides essential news for energy and environment professionals.
For years, Delaware has been on the sidelines as the emerging offshore wind industry flocked to neighboring states, but a new law could transform the industry in the state — if it’s not too late.
Delaware’s Democratic-led Legislature recently ordered a study of the state’s offshore wind potential to be reported back by the end of the year. The move, which was signed by Gov. John Carney (D) this month, adds momentum for the state to set its first target for offshore wind, a goal of many lawmakers and environmental groups.
“We’re alone among our neighbors of not really having wind targets,” said state Sen. Stephanie Hansen (D), who has spearheaded the state’s reassessments of offshore wind to meet its climate targets as chair of the state Senate Environment and Energy Committee. “Delaware, as of now, I think, is really firing on all cylinders to move into the next phase of energy planning and implementation.”
If the study leads to a state offshore wind goal, it would bring Delaware in line with neighboring states and give it an opportunity to compete for industry jobs and businesses emerging along the East Coast. Power grid operator PJM Interconnection LLC is assisting with the study in looking at transmission impacts. But concerns about the cost of offshore wind still linger from a 2018 analysis that effectively tabled wind ambitions in the state for years.
Meanwhile, a movement against offshore wind along coastal communities has begun to capture the sentiment of Delaware towns and some lawmakers.
“I think it is harmful,” said state Sen. Bryant Richardson (R), the only senator to vote against Hansen’s study. He opposes the offshore wind industry due to its potential costs and what he says are negative impacts to the ocean environment and views from the shore.
“It’s an eyesore,” he said of the industry.
Delaware is juggling its offshore wind future as the industry reaches a turning point in the U.S.
Thousands of turbines are expected to go up in the northeast Atlantic in the coming years, spurred by state commitments and subsidies from Maine to Virginia. That comes alongside millions of dollars of promised state and private investments to beef up aging ports, build manufacturing and steel fabrication facilities, and make job programs to create a workforce capable of building and maintaining the new industry.
The wave of new proposals is partly thanks to the Biden administration’s commitment to raise enough wind farms in the ocean to power 10 million homes by 2030. The White House on Tuesday approved the nation’s fourth commercial-scale offshore wind farm off the coast of Rhode Island and has said it remains “on track” to reach 16 offshore wind environmental reviews by 2025.
The administration also announced last month potential new lease areas in the central Atlantic, including a swath of ocean about 30 miles off the coast of Delaware Bay. If developed, that area would add to two planned offshore wind farms that sit off the Delaware coast in federal waters.
Delaware’s grid may not reap the power of those two offshore wind projects, which are helping Maryland meet its offshore wind target. But experts say the new offshore wind areas could offer electricity to help Delaware reach its renewable portfolio standard of 40 percent renewable power by 2035.
Chelsea Jean-Michel, a wind analyst at BloombergNEF, said local opposition and limited space has made it difficult for the state to grow its renewable sector onshore, making offshore more attractive.
“Offshore wind projects can help decarbonize Delaware’s energy system by providing bulk renewable energy capacity in one go,” she said in an email.
For years, Delaware has flirted with the idea of offshore wind to help it decarbonize. It was poised to be the first U.S. state with an offshore wind farm when the proposed Bluewater Wind offshore wind project secured a long-term contract more than a decade ago with the state’s utility. The proposal later fell apart, largely because of cost concerns and investment uncertainty amid the recession.
Offshore wind got a second look largely thanks to Carney, who in 2017 ordered a study of the industry’s potential role in reaching state clean energy goals.
That analysis found that the cost of offshore wind energy would be high, prompting many lawmakers to shy away from supporting turbines off the coast.
One reason why offshore wind is getting another look in the state now is that costs have fallen significantly as projects have advanced in the U.S.
An updated report from Delaware’s Special Initiative on Offshore Wind (SIOW) last year found the cost of a Delaware offshore wind project — if it was large enough to capture economies of scale — would cost the same as existing sources of electricity in the state like natural gas and solar. That would be the case without state subsidies or tax breaks, researchers said. The study considered federal incentives that were expanded in the Inflation Reduction Act giving developers a 30 percent tax credit for offshore wind.
“There’s enough time, plenty enough time, for Delaware to do one project, maybe two, and still get advantage of that tax credit,” said Willett Kempton, a professor at the University of Delaware’s School of Marine Science and Policy and a leader of SIOW.
Kempton’s report also weighed how fossil fuels negatively impact human health and the environment, driving up the overall cost of using those sources for power. When those factors were considered, offshore wind became cheaper than existing sources like natural gas in the study’s models.
Hansen said Delaware hired analysts to interpret the report. When executive action did not occur, she said she wrote the legislation that passed earlier this year tasking the governor’s office and state regulators to review and report back to the Legislature on offshore wind’s potential.
“We need to hear from the administration on this, is this a direction that we ought to go?” she said. “I can tell you that there is the legislative will to move this forward. But we also aren’t experts.”
Carney’s office declined to comment for this story.
Hansen said that Delaware’s tardiness on offshore wind could lead it to lose out on benefits from the industry, such as jobs and manufacturing.
Jean-Michel, with BloombergNEF, noted wind developers have forged relationships with nearby state lawmakers that give those states an advantage.
“Given that it’s entering the market later and it is likely to be a smaller market, Delaware may not benefit as much economically through offshore wind in terms of green growth or jobs, or it may have to pay a significant premium for offshore wind projects if it wants to stimulate that local manufacturing sector,” she said.
However, Kempton, with the University of Delaware, said he would warn lawmakers, if they proceed with a procurement target in Delaware, against tying offshore wind projects to local investment.
Other states have encouraged offshore wind developers to bundle economic development plans into their wind proposals, leading to manufacturing projects planned in states like New York and Maryland.
But those investments mean the price of electricity for those projects is higher, Kempton said, noting that wind developers may not be the most effective planners for associated supply-chain businesses. They also may not have long-term commitments for jobs in mind onshore.
Offshore wind supporters are hoping when the Delaware Legislature meets again in January, lawmakers will have offshore wind on their minds.
Hansen said she couldn’t disclose some of the conversations happening now on offshore wind but that Delaware leaders could make progress even before the session convenes.
But as the state weighs a greater role for offshore wind, industry opponents may also be growing.
It’s a pattern that has played out in other coastal states as offshore wind proposals draw pushback from beachfront homeowners who don’t want steel marring their ocean views and town councils concerned the industry could hurt tourism. Conservative groups such as the Delaware-based Caesar Rodney Institute also are supporting the opposition movement.
Richardson, the Delaware Republican, said he’s been reading material put out by the institute on offshore wind and connecting with opponents who share his skepticism about the industry, its costs and its impacts.
“I hope it will fail,” he said of the state’s plan on offshore wind.
This story was originally published on Jan. 19 by THE CITY. Sign up here to get the latest stories from THE CITY delivered to you each morning.
For Tawanna Davis, winter means hauling out an electric space heater to keep warm when her Bronx building’s heat is insufficient.
Davis, 51, has for two decades been a resident of Twin Parks Tower North West in Fordham Heights, the site of a deadly fire earlier this month that officials have said was sparked by a malfunctioning space heater.
“You get the ice on the inside [of the window] and everything,” Davis told THE CITY. “It be really, really cold in your apartment.”
While some tenants said they’d be shivering without space heaters, others said they had to open their windows in the winter when their units became unbearably warm.
That hot-and-cold situation, which many New York apartment dwellers know all too well, highlights the importance of improving energy efficiency in residential buildings.
And this can be especially true for subsidized, income-restricted complexes — aka “affordable housing” — where improved comfort and safety are immediate benefits beyond slashed greenhouse gas emissions.
But upgrading affordable housing stock at the necessary pace presents logistical and financial challenges, which the administrations of New York City Mayor Eric Adams and Gov. Kathy Hochul need to solve regardless in order to achieve their climate goals.
The Twin Park Towers, built in 1972, are part of the state’s Mitchell-Lama housing program and receive some funding through the federal Section 8 program, which helps subsidize rents for low-income tenants.
“The fact that a relatively new building by New York standards has people living in situations requiring space heaters in order to reach a level of comfort suggests the complexity of this issue,” said Jonathan Meyers, a partner at HR&A Advisors, a firm that consults on real estate strategy and policy in New York and around the country.
“It’s a very stark reminder that there’s a fine line between inefficiency, which most of us can tolerate on a day-to-day basis, and tragedy, which is intolerable,” he added.
People working on the state’s decarbonization strategy, born out of New York’s Climate Leadership and Community Protection Act of 2019, say improvements in building energy efficiency aren’t just ways to mitigate climate change and get off of fossil fuels.
The green push, they say, can also lead to immediate health benefits: Properly insulating windows, for example, can ensure consistent temperatures in all seasons, and installing electric heat pumps can also help cool air. Both are useful to combat deadly extreme heat in the summer and illness-inducing chills in the winter.
“In terms of ever-increasing incidences of extreme-weather events, energy efficiency is going to play a bigger, maybe even life-saving, role,” said Eddie Bautista, director of the New York City Environmental Justice Alliance and part of the group that advises the state’s Climate Action Council.
On Tuesday, as if to further demonstrate the myriad dangers of fossil fuels, an apparent gas explosion rocked a residential building in Longwood, just a few miles south of Twin Parks. The blast killed one person and injured several others, officials said. Adjacent buildings were ruined in the ensuing fire, and the Fire Department is still investigating the exact cause.
The incident showcases the importance of phasing off gas and oil, not only to avoid carbon emissions, but to increase safety, environmental advocates note.
Gov. Kathy Hochul included in her budget plan this week a proposal to ban gas hookups in new buildings across the state by 2027, echoing a city law signed in recent weeks. Environmentalists say the governor’s timeline is not quick enough, and some asked for more funding to electrify existing housing.
“Thousands of New Yorkers are already dying premature deaths every year because of the fossil fuels we’re burning in our homes, and every once in a while, it’s not a slow, premature death thing — your house literally explodes,” said Alex Beauchamp, northeast regional director of the nonprofit Food and Water Watch. “We have to move much faster, not only for new buildings, but for existing ones as well.”
As part of the budget, Hochul also proposed a five-year, $25 billion housing plan that would in part cover efforts to weatherize and electrify New York’s housing stock. Her State of the State proposal earlier in the month cited projects to encourage electric, high-performance heating equipment and renovating buildings to keep temperatures consistent “to reduce the need for space heating and air conditioning,” among other reasons.
For over a decade, building owners in New York City have been required to tally their water and energy consumption data each year and submit the information to the city. Based on that, they get a grade. A 2019 law required landlords to make their efficiency grade public.
Twin Parks, for a second year in a row, earned a D in 2021, the same as about half of all buildings in the Bronx. Citywide, 39% of all buildings earned Ds.
The building, which installed new gas-powered boilers in 2015, according to city records, faces similar challenges to improving its efficiency as many other older buildings. Its residents, like many others in the city, don’t have separate thermostats to control indoor temperatures in their units.
They also don’t have individual electric meters, like many affordable housing buildings, meaning that they are not encouraged to use less power — so a resident can run a space heater all day and even open windows while doing so without thinking about the bill.
A spokesperson for the Twin Parks owners did not respond to requests for comment.
Landlords, who foot utility bills in the absence of what’s known as sub-metering, must themselves make improvements to reduce energy usage. Beyond money-saving potential, such capital upgrades focused on efficiency can result in healthier, more comfortable living quarters for residents.
Homes and Community Renewal, a state agency that develops and preserves affordable housing, considers energy efficiency for both new construction and preservation projects, a spokesperson said. It also requires private developers that work with the state to stick to efficient-design guidelines when applying for funding.
The problem lies in how to shore up enough funds to cover the scope of the efficiency-related work that must be done, while balancing the need to create and preserve affordable housing.
Housing dollars from the city, state and federal government are stretched “to the max,” said Lindsay Robbins, a senior advisor for building efficiency and decarbonization for the Natural Resources Defense Council.
Many of the investments needed to improve existing subsidized affordable housing are identified when owners seek to refinance, which happens every 15 to 20 years, according to Robbin.
The city and state in 2017 developed an “integrated physical needs assessment” for properties, a tool which considers necessary capital improvements, like a roof replacement, along with an energy efficiency audit, among other measures.
“If we don’t make the most of that opportunity and ensure that building owners have resources and financing they need to really make these properties safe and healthy and efficient and electrified, that building’s probably not going to do diddly-squat for another 15 to 20 years,” Robbins said.
“We need to fundamentally rethink the kinds of public resources that we put into this … because putting people in quality and healthy housing — there’s nothing more important than that.”
Property owners can also apply for loans and grants through the city’s Department of Housing Preservation and Development, and they may participate in a $24 million pilot run by the New York State Energy Research and Development Authority and HPD that seeks to finance electrification and energy efficiency upgrades in about 1,200 units of housing.
Another $30 million in state funds are available for income-restricted buildings that are seven stories or shorter through the RetrofitNY program.
Rep. Ritchie Torres (D-The Bronx) on Friday urged for the passage of federal legislation that would include about $150 billion for housing investments, which, he said, could be used to “create, preserve and retrofit 1.4 million units of affordable housing.”
“Part of Build Back Better must be building back safer,” he told reporters at the scene of the inferno earlier this month. “The fire in Twin Parks North West must be seen in the context of historical disinvestment from affordable housing, from places like the South Bronx, from lowest income communities of color, and the Build Back Better Act presents a historic opportunity to reverse decades of disinvestment.”
In addition to more federal funds, Robbins also wants to see more private financing, grants and investments from the New York Green Bank, a state agency with the mission to “accelerate clean energy deployment.”
The financing challenge will come to a head with new Local Law 97, which sets greenhouse gas emissions caps for buildings over 25,000 square feet. Mitchell-Lama buildings like Twin Parks have a compliance date of 2035, while most buildings must emit below the specified targets starting in 2024.
Now it’s up to Mayor Eric Adams’ administration — with the help of an advisory board — to finalize the rules that govern the new law and figure out how to help property owners finance the upgrades necessary to achieve the emissions caps.
In the meantime, state Attorney General Letitia James said she intends to use the power of her office “to get to the bottom of this fire” as environmental advocates continue to sound the alarm that energy efficiency equals safety and justice.
“We can’t achieve a climate just society without centering BIPOC [Black, Indigenous and People of Color] and low-income communities,” said Daphany Sanchez, executive director of Kinetic Communities Consulting, a firm focusing on energy equity. “The fire that you saw in The Bronx is exactly the issue: the result of people ignoring climate, the result of people ignoring Black and brown communities.”
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A St. Paul, Minnesota, college’s microgrid research center is preparing to expand after securing significant new state and federal funding.
The University of St. Thomas’ Center for Microgrid Research plans to triple its three-person staff and enroll more students thanks to money from a $7.5 million state legislative appropriation and $11 million in federal defense bill earmarks secured by U.S. Rep. Betty McCollum.
State officials who championed the funding said they hope the center’s education and research efforts can help train future grid technicians and smooth the state’s path to 100% clean electricity by 2040.
“We’re at a time of not only a great transition but of a great opportunity,” said state Sen. Nick Frentz, a Democrat from Mankato. “We’ll be looking at transmission, distributed generation and innovation as we transition, and funding for the St. Thomas microgrid research is a part of the state’s plan to lead.”
Microgrids are small, hyperlocal networks of electricity generation and storage systems that together can operate independently of the rest of the power grid. They’re often used by military, healthcare or research campuses that require a level of reliability greater than what the local utility can provide.
But they’re not just expensive backup power for wealthy institutions. Microgrids are also expected to play a role in the clean energy transition, helping to get the most value out of clean energy investments and connecting customers to one another in new ways.
“Microgrids are another opportunity for clean energy,” said John Farrell, co-director of the Institute for Local Self-Reliance and director of the Energy Democracy Initiative.
Microgrids could help balance variable power sources such as wind and solar, helping to absorb and store surplus generation and share it with the grid later when it’s needed, Farrell explained. While microgrids can be powered by fossil fuel backup generators, they also can run on solar panels, whose value can be greater when they are networked with arrays on multiple sites.
The University of St. Thomas has been developing its campus microgrid for about a decade. Today, it consists of a 48-kilowatt rooftop solar array along with a diesel generator, a lead acid battery pack, and an inverter that converts direct current to alternating current. A campus substation connects to Xcel’s local grid.
Like most microgrids, the St. Thomas system can run in “island” mode, meaning it can operate even when the power grid fails by drawing on the battery, solar panels and backup generation.
The Center for Microgrid Research opened in 2020 as a way to build research and education programming around its campus microgrid. Mahmoud Kabalan, the center’s director, was hired in 2017 from Villanova University to teach engineering and helped secure seed funding from Xcel Energy’s Renewable Development Fund for the program.
Don Weinkauf, the school’s dean of engineering, said the new state and federal funding will allow the center to expand both the program and the microgrid system itself.
“This stuff is expensive,” Weinkauf said. “Each piece of equipment is on the scale of a million dollars, and right now, we are expanding to reach a 1-megawatt capacity.”
The center will have 10 full-time employees next year and be able to enroll up to 25 students. More staff and students will allow more collaboration with utilities, corporations, and fellow researchers. Within the next few years, the microgrid will connect to more than five buildings, including a new science, technology and arts center, dorms and a parking facility.
Kabalan said he expects more funding from the U.S. Department of Defense, which sees the program as a workforce training ground and source of applied research to help design, test and implement microgrid technologies.
“This funding will position the state and the nation to produce innovative engineers that can address the need for microgrids and distributed energy technologies,” Kabalan said. “A big part of what we do is educate and train engineers.”
The center is collaborating with the U.S. Army Corps of Engineers on a military initiative to install microgrids at every military base by 2035, Kabalan said. Research related to that project will be publicly available to other microgrid operators and researchers. Students and faculty have other clients and supporters, including utilities Xcel Energy and Connexus Energy.
Part of the center’s design and strategy has been to serve as a place where clients can test how their equipment works in a microgrid. The technology available includes test bays to plug in products, controllers, relayers and emulators capable of creating simulated environments.
“Interested parties can literally roll in their equipment and we can test their technology at full scale,” Weinkauf said. “This is an industry-friendly center that can help us, and the state of Minnesota, navigate our future grid.”
Students like the hands-on quality of the microgrid center. Engineering student Oreoluwa John Ero, a research assistant at the center, has helped develop models to attach the new STEAM building to the university’s microgrid.
“I like the ability to see and practice the different things you learn in school and the chance to learn while on the job,” Ero said.
Utility industry professionals who have visited the center also like the hands-on approach. Connexus Energy engineering and system operations director Jared Newton said the center “immediately resonated with me because I saw students learn on real-world equipment that we use. The problems they were trying to solve and the tools they were using were familiar.”
As climate change and aging infrastructure make weather-related power outages more common, Kabalan thinks microgrids will become more common for critical infrastructure such as hospitals, prisons, data centers, food storage areas, cooling centers and government facilities.
Ero sees how the microgrid could transform the power grid in the United States and in his home country of Nigeria, where electricity outages are common and can last for hours and weeks.
“It’s a technology that should be made available to people,” Ero said, “not just in Nigeria, but all over the world.”
A Minnesota gas utility says it is successfully blending “green” hydrogen into its natural gas pipeline system in one of the first such tests in the country.
Since last summer, CenterPoint Energy customers near downtown Minneapolis have been burning a bit of hydrogen alongside the usual mix of methane gas in their stoves and furnaces.
The utility completed a $2.5 million hydrogen production pilot facility last year and began injecting the carbon-free fuel into its system in small amounts in June. Hydrogen accounts for no more than 5% of the overall blend at any time.
“The good news is that this facility has integrated well with our distribution system,” CenterPoint spokesperson Ross Corson said of the facility’s first months of operation.
The pilot project is a chance for the utility to iron out operational challenges. It’s already made several adjustments, including changes to a water circulation system and the way in which it removes moisture before injecting the gas into its pipelines.
But even a technical success for the project is unlikely to resolve broader questions in Minnesota and beyond about the role of hydrogen in a clean energy economy. Some experts and climate advocates have argued that blending hydrogen into the natural gas system is an inefficient and expensive climate solution compared to switching to electric appliances, and that hydrogen should be reserved for industrial uses and other difficult-to-decarbonize sectors.
Most hydrogen today is produced from a chemical process involving fossil fuels that releases significant carbon emissions. “Green” hydrogen is produced by using electricity to split water molecules into hydrogen and oxygen. If done with renewable electricity it can be a zero-emission fuel source.
“The color wheel of hydrogen is complex and a little bit overwhelming, but green hydrogen, as long as it’s generated using renewable electricity, is the gold standard,” said Joe Dammel, buildings program manager for the St. Paul clean energy advocacy group Fresh Energy, which publishes the Energy News Network.
CenterPoint’s small plant sits on the site of a former coal gasification plant that began operating when CenterPoint was called the Minneapolis Gas Light Company. The company chose the site due to its central location in its pipeline system and the availability of space. The grounds now host the green hydrogen center and a parking lot for workers taking courses across the street at a CenterPoint training center.
John Heer, the utility’s director of gas storage and supply planning, oversees the facility. Making green hydrogen is not a huge technical feat and involves electrolysis, Heer said.
City water is purified before being piped into a 1-megawatt electrolyzer that processes two gallons a minute. The facility disperses oxygen through fans outside the plant. “We’re learning by doing,” Heer said. “We need to know how it works before we can scale it in a larger facility.”
The facility gets electricity from Xcel Energy’s grid and offsets its electricity use with wind energy renewable credits, also purchased from Xcel. Critics have disputed whether hydrogen facilities that use renewable energy indirectly through offsets should qualify as “green.”
Part of the pilot is determining how hydrogen changes the characteristics of natural gas in pipelines. Hydrogen is less dense than methane and only carries about one-third as much energy per cubic foot. The molecules are the smallest in the universe and can exacerbate pipeline cracks and cause embrittlement, increasing leakage and explosion risks above certain concentrations, according to the National Renewable Energy Laboratory.
In July, a California Public Utilities Commission study found that 5% blends of hydrogen and natural gas are safe but going above that amount could require modifications to stoves and water heaters. Moreover, since green hydrogen carries less energy content, more of it would be required to replace natural gas, the report said.
Even if produced from fully renewable sources, hydrogen is unlikely to replace natural gas for various reasons, Dammel said. The manufacturing process absorbs more energy than it produces, with roughly a 30% to 35% loss. Larger green hydrogen plants will need to compete for clean electricity at a time when demand for wind and solar power has skyrocketed.
“We think that just adding hydrogen to the distribution system to substitute for fossil gas has economic and technical limitations,” Dammel said. “It’s not going to be a 100% substitute for every molecule of fossil gas that’s right now in the system.”
To replace all the nation’s natural gas consumption with green hydrogen would be an enormous undertaking, demanding hundreds of billions of dollars in investment in renewable energy, electrolysis technology, pipeline infrastructure and storage.
Critics also say green hydrogen production requires much water, a potential problem in more arid regions than Minnesota. Yet one study and market data suggest that its manufacture consumes far less water than plants using coal, nuclear, natural gas, biomass or solar.
For now, clean energy advocates believe the best application for green hydrogen will be heavy-duty industrial applications where using electricity cannot cost-effectively replace natural gas, Dammel said.
The biggest hydrogen markets currently are petroleum refiners, fertilizer companies, food processors and metals treatment firms. Hydrogen’s advocates, however, believe that in addition to manufacturing it can revolutionize the transportation sector.
Hydrogen is expected to get a boost in 2023 from the federal government. The Infrastructure Investment and Jobs Act, signed in 2021, includes $9.5 billion in incentives for clean hydrogen. The Department of Energy’s Hydrogen Shot program has set a goal of reducing the cost of 1 kilogram of hydrogen to $1 in one decade.
In September, the Energy Department released a 112-page clean hydrogen roadmap that calls for funding regional hydrogen hubs, support for manufacturing plants, and research into reducing the cost of electrolysis.
The Inflation Reduction Act includes a tax credit for green hydrogen that will soon provide up to $3 a kilogram credit for producers. The U.S. Treasury Department is expected to decide soon what criteria need to be met, with some environmental groups lobbying for on-site renewable generation to be a requirement.
“It costs more to produce hydrogen than to use natural gas today, so $3 a kilogram is kind of a big deal,” said Heer, the utility spokesperson. CenterPoint also wants to build a larger, second hydrogen plant but the timing on that has yet to be determined. The pilot is expected to avoid 1,200 tons of carbon emissions annually.
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