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PORTSMOUTH — Siemens Gamesa announced Monday that it plans to build the United States’ first offshore wind turbine blade facility at the Portsmouth Marine Terminal, notching a major win for Virginia as it strives to become a hub for the nation’s fledgling offshore wind energy industry.
The announcement was made Monday at the terminal by U.S. Energy Secretary Jennifer Granholm and Virginia Gov. Ralph Northam.
The Spanish-German wind engineering company said it plans to invest more than $200 million in the Portsmouth Marine Terminal facility, which will produce blades for offshore wind projects throughout North America, per Northam’s office.
The facility is expected to create over 300 jobs.
Virginia’s largest electric utility, Dominion Energy, previously selected Siemens Gamesa as the turbine supplier for its 2.6 gigawatt Virginia Coastal Offshore Wind project being developed 27 miles off the coast of Virginia Beach. A 12 megawatt pilot constructed by Dominion became the nation’s first offshore wind installation in federal waters and began delivering energy to customers in January 2021.
Offshore wind is increasingly becoming a critical component of both electric power producers’ plans to transition away from fossil fuels and state and federal aspirations to develop renewable energy that can replace coal and natural gas while driving economic growth.
Earlier this month, President Joseph Biden’s administration laid out an ambitious plan to develop offshore wind along much of the East Coast, West Coast and Gulf of Mexico. In March, the administration set a target of deploying 30 gigawatts of offshore wind by 2030.
Virginia has also set an aggressive goal under the 2020 Virginia Clean Economy Act of developing 5.2 gigawatts of offshore wind by 2034. Dominion’s CVOW project, which would produce half of that power, is currently being reviewed by the U.S. Bureau of Ocean and Energy Management.
But even as states race to develop wind projects, turbine components continue to be produced overseas, with major manufacturers including Siemens Gamesa telling Reuters earlier this year that they need to see a reliable pipeline of projects moving forward in the U.S. before putting down roots stateside.
Shipping turbine components across the Atlantic for U.S. projects, however, comes with special challenges.
Under the federal Jones Act, any vessel carrying goods between two points in the U.S. must be built and registered in the United States. Despite that restriction, no such vessels with the capacity to transport turbine components currently exist in the U.S. Dominion is building the first Jones Act-compliant offshore wind installation ship in Texas, which has been christened Charybdis after a sea monster in “The Odyssey” and is expected to be completed by late 2023.
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Minnesota utilities will soon use existing fossil fuel plant infrastructure to transport clean energy to Midwest’s regional electricity grid.
The workaround avoids the Midwest’s bottlenecked transmission grid managed by the Midwest Independent System Operator, Inc. (MISO), the regional transmission organization currently hamstrung by a lengthy project queue and a capacity shortage.
The process of connecting new generation to the grid in MISO’s 15-state territory takes an average of three years, according to an Americans for a Clean Energy Grid study. Meanwhile, interconnection costs have more than quadrupled in the last few years and now represent almost a quarter of a typical wind farm’s budget.
As a result, projects have been canceled or trimmed back, with 5 gigawatts of clean projects pulled in the last two years despite having signed power purchase agreements, the study reported.
The situation has sent Minnesota utilities on a search for existing, underutilized transmission capacity, often connected to aging or retired fossil fuel power plants, or “peaker” plants that only run sporadically during high-demand times for electricity.
“I think it’s a great idea because we’re in a situation where we don’t have enough transmission capacity for our evolving system to add wind and solar quickly,” said Allen Gleckner, lead director of clean electricity at Fresh Energy, which also publishes the Energy News Network. “It’s good to see utilities leveraging all the ways they can to add renewables without having to deal with difficulty through the regular interconnection process right now.”
Though transmission is critical to a clean energy transition, the sector remains mired in challenges ranging from underinvestment to siting and permitting barriers. Recent projects in the region, such as the $2 billion CapX2020, added 800 miles of transmission lines that quickly filled with new wind and solar developments. President Joe Biden’s administration plans to ramp up spending on transmission to relieve the backlog, but it will likely take years to see the impact.
“The grid is going to be the vehicle that allows Minnesota to reach its clean energy goals,” said Beth Soholt, executive director of the Clean Grid Alliance. “An enhanced grid is going to be required for getting to a higher level of electric vehicles, for electrifying buildings and for continuing to reduce carbon from the electricity sector. It’s all going to be built with the grid as the backbone.”
NextEra Energy is building two wind farms that will use Great River Energy’s peaker plants to transmit electricity. The first project is a new 259 megawatt wind farm that will be linked to the grid at Great River Energy’s Pleasant Valley Station peaker plant southwest of Rochester, Minnesota. A 300 MW wind project will interconnect at Great River Energy’s Lakefield Junction Station in south-central Minnesota. The roughly two-decade-old plants are around 30 to 40 miles from the wind farms.
Otter Tail Power plans to build a 49.9 MW solar facility at Hoot Lake, a 100-year-old western Minnesota coal plant that closed in May. The utility will use about one-third of the existing transmission capacity at the site to connect the solar to the MISO grid in 2023. Minnesota Power is also preparing three new solar installations next year, two of which will be built near existing power facilities.
On a much larger scale, Xcel Energy’s integrated resource plan calls for using interconnection rights at its Sherburne County Generating Plant (Sherco) and Allen S. King Generating Plant, both just outside the Twin Cities. The utility has rights for 2,600 megawatts and is considering ways to tap wind resources from southwest Minnesota using a new transmission line that would connect to the Sherco plant.
Last week, clean energy advocates raised concerns about two additional natural gas peaking plants in Xcel’s resource plan, Soholt said, but they applauded the approach of using Sherco and King to transport clean energy.
Zac Ruzycki, resource planning director for Great River Energy, said the utility plans to match all of its remaining peaker plants with wind farms, allowing as much as 1,400 MW of clean energy to enter the grid. The advantage of using peaker plant interconnection rights goes beyond just avoiding the MISO queue, he said.
Typically, new wind projects are studied together and assessed the cost of any required grid upgrades. By using existing interconnection rights, the wind farms avoid grid improvement costs, delays, and unexpected changes that might be required for a new grid interconnection through MISO.
Peaking plants generate power less than 5% of the year, he said, with utilities mainly initiating their use when weather or other issues threaten reliability, or when market prices surge. Great River Energy also sees peakers as a backstop to help balance variable power sources such as wind and solar.
“We think it’s a great complement because we’re utilizing the interconnection to create a more efficient and more effective solution for our members,” Ruzycki said.
Mark Lennox, project director for NextEra Energy’s Dodge County Wind, said the company will use what MISO calls a “surplus interconnection” to connect to the Pleasant Valley Station peaker plant. It allows new energy sources to join the grid at existing plants not using their full transmission capacity. NextEra pulled the project from the traditional MISO process in 2020 “because of exceedingly uneconomic costs.”
Otter Tail’s manager of renewable development, Randy Synstelien, said solar made the most sense at the utility’s Hoot Lake site, because the site had plenty of space available on site.
“We’re reusing the interconnection and reusing the land on that site,” he said.
Otter Tail sees the possibility of using other sites, potentially peaker plants, to incorporate clean energy transmission into other existing interconnections. The advantages of the Hoot Lake include an “expedited process” and lower interconnection costs, especially since in rural areas, even shared system upgrade costs for a clean energy project “can be very substantial and impact project viability,” Synstelien said.
Great River Energy’s initial attempt to build wind farms and connect them to a power plant failed. After finding no buyers, Great River Energy announced the closure of the 1,100 MW Coal Creek Station in McLean County, North Dakota, in 2020. McLean County officials passed a moratorium on wind farms after learning Great River Energy had plans to develop wind and use the plant’s grid connection to transport clean energy.
Having been rebuffed by the county, Great River Energy switched the investment it planned to make in North Dakota to Minnesota. Four Next Era Energy wind farms in Minnesota will now sell power to Great River Energy.
“The original plan was to site wind in North Dakota, and when that didn’t work out, we pivoted to alternative plans that we had in Minnesota,” Ruzycki said. “Once the Coal Creek Station interconnection was no longer in our power supply plan, we were able to leverage the interconnection of our other generators to our advantage.”
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