Saturday, July 20, 2024

After Siemens Turbine Plant Cancellation, Can Hampton Roads Still be a Hub for Offshore Wind?

The Portsmouth Marine Terminal where Siemens Gamesa had planned to build an offshore wind turbine blade facility. (Sarah Vogelsong/Virginia Mercury)

HAMPTON ROADS — Detroit is known for automobile manufacturing. San Francisco is known for technology. Hampton Roads hopes to be known for offshore wind development.

In 2020, the Virginia Clean Economy Act, an ambitious roadmap to decarbonize the state’s electric grid by midcentury, was signed into law with provisions encouraging the development of thousands of megawatts of offshore wind. The landmark legislation paved the way for the approval of Dominion Energy’s 176-turbine Coastal Virginia Offshore Wind farm off Virginia Beach earlier this year. That project in turn raised hopes that the industry would bring economic stimulation to the region. In October 2021, the announcement that the Spanish-German engineering company Siemens Gamesa had chosen Portsmouth for the site of the East Coast’s first turbine manufacturing facility seemed to bear out those hopes.

“Today’s announcement will help position Hampton Roads as the offshore wind development hub for the nation,” said Dominion CEO, President and Chair Bob Blue at the time.

However, on Nov. 10, Siemens Gamesa announced it was canceling those plans, saying that “development milestones to establish the facility could not be met.”

The loss of the turbine manufacturing facility, with its associated jobs and tax revenue, is a blow to Hampton Roads, one that has raised questions about whether the region’s dreams of becoming an offshore wind hub can be realized. But Dominion, local officials and environmental and economic development groups aren’t giving up hope: They say the ongoing work on CVOW, the region’s maritime infrastructure and workforce and burgeoning nationwide calls for a more renewables-focused grid keep them optimistic that Hampton Roads can still be an East Coast hub of the industry.

“We have a lot of the assets that the industry needs to develop in the U.S.,” said Matt Smith, director of energy and water technology at the Hampton Roads Alliance, an economic development organization in the region. “We still feel like those assets position us well to be a hub. It hasn’t really changed in light of the decision of one company.”

Hampton Roads isn’t alone in weathering industry setbacks as the U.S. offshore wind industry faces rising costs and scheduling delays. Most significantly, on Oct. 31, Danish wind giant Ørsted announced it was canceling two offshore wind projects off the coast of New Jersey because of rising financing and capital costs.

Still, Hampton Roads sees the advancement of Dominion’s project as an example that while the industry may be struggling, its hopes are still afloat.

“It’s a normal course of business at times for a project to start and then go, ‘Well, you know, the time is not right,’ and then someone else steps in,” said Joe Harris, a spokesman for the Virginia Port Authority.

A proving ground 

Dominion says CVOW, which is “on time and on budget,” with a completion date of the end of 2026, will continue to be an anchor for industry growth. Utility spokesman Jeremy Slayton said the cancellation of the Siemens plant won’t impact the project’s timeline, because the utility will get its blades from the company’s European plant.

“We were disappointed to hear that the blade factory has been canceled,” said Jeremy Slayton, a spokesperson for Dominion. “But we also believe that the expertise gained by supporting our project will establish Hampton Roads as a center for offshore wind development.”

The same day that Ørsted canceled its New Jersey project, CVOW received a critical final approval from federal regulators. That project’s advancement will continue to drive economic activity, said Slayton, pointing to the development of Fairwinds Landing at Lambert’s Point Docks in Norfolk as an operations and maintenance center.

Joel Rubin, director of the offshore wind advocacy group WINDSdays, said the two turbines Dominion already has out at sea and the advancement of CVOW are signs that Hampton Roads is still “in a great position in this industry.”

“I think we just need the economy to be in better shape for these companies,” Rubin said.

Infrastructure and workforce 

Local, port and economic officials in the region say their investments in the Port of Virginia and Hampton Roads will continue to make the region attractive for offshore wind.

Brian Donahue, director of economic development for Portsmouth, acknowledged the loss of the Siemens facility was a “setback.”

“There was an opportunity for a significant capital investment and job creator that would have come along from it,” Donahue said.

But the loss of the facility doesn’t necessarily mean other businesses won’t come into the region, he said.

“There are other groups in the offshore wind industry that are looking for locations to host projects,” Donahue said, although he declined to provide specific names. “There are other opportunities that exist, and we’re currently investigating this.”

Locals say that Hampton Roads still offers the robust infrastructure needed for wind industry growth, as well as a skilled workforce familiar with maritime fields. Slayton pointed out that the deep channel access and lack of overhead restrictions in the area make it uniquely suited for the large vessels needed to carry components out to sea. Onshore, the Virginia Port Authority has put more than $220 million toward the Portsmouth Marine Terminal to develop areas where large wind components like turbines and monopile foundations can be stored.

“This terminal that we’re talking about has already received its first load of monopiles for the CVOW project,” Harris said. “We’re taking shipments as we speak.”

Furthermore, Smith noted, Hampton Roads has long seen “maritime adjacent” businesses flourish due to the presence of the U.S. Navy.

“I think our overall plans around supply chain development, and then also around kind of site readiness and workforce development are still in place, and we’re working with our partners to move that forward,” Smith said.

Jobs for the CVOW operations and maintenance center will still be in place once the project is fully operational, Slayton added.

“If you’re in the offshore wind industry, and you’re looking somewhere to stage components,” Hampton Roads is “a very attractive spot,” Slayton said.

A national push for renewables

The continued establishment of state and national targets for offshore wind, projects that will require extensive manufacturing, also gives environmental groups reason to hope that a Virginia hub may still be possible.

Nationally, President Joe Biden has set a target of developing 30 gigawatts of wind by 2030. While the two projects in New Jersey have been canceled, others are still underway, including one by Avangrid in Kitty Hawk, North Carolina, said Eileen Woll, offshore energy program director with the Sierra Club’s Virginia chapter.

Despite recent struggles, “the train is out of the station on offshore wind,” she said.

That means all of the thousands of components needed for a turbine to be functional, from blades to internal gears, will have to be constructed. Woll said that could lead to different regions along the East Coast specializing in the manufacture of different parts.

“Everybody’s kind of got their thing. I do believe we will still be the blades,” said Woll. “I think everybody’s recognizing that, being a frontier industry, there’s a piece for everybody.”

Virginia Mercury is part of States Newsroom, a network of news bureaus supported by grants and a coalition of donors as a 501c(3) public charity. Virginia Mercury maintains editorial independence. Contact Editor Sarah Vogelsong for questions: Follow Virginia Mercury on Facebook and Twitter.

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