Dominion Resources Inc., owner of Virginia’s largest utility, plans to solicit another round of bids for an offshore wind farm after rejecting an earlier proposal as too expensive.
The Richmond-based company expects to issue a formal request for bids in the first quarter for the Virginia Offshore Wind Technology Advancement Project, according to an emailed statement Friday.
Dominion’s decision follows a series of meetings with manufacturers, shipbuilders and engineers, including one Friday in Richmond aimed at finding ways to make installing wind turbines at sea more affordable.
Large turbines have been a common sight in European waters for years, while high costs have slowed their adoption in the United States. The country’s first offshore wind farm began construction in Rhode Island in July.
“We continue to be committed to this project and finding ways to make it more cost-effective,” Mary Doswell, a senior vice president with Dominion’s energy solutions unit, said in the statement.
The earlier proposal for the project was almost double the company’s estimate of $225 million to $230 million.
The planned wind farm will be 27 miles off the coast of Virginia Beach and will comprise two 6-megawatt turbines. It’s a pilot that’s intended, in part, to test technologies that will withstand hurricanes.
The earlier bids were for the entire wind farm. The next round will seek “bids from a number of companies, with each specialty company performing only its portion of the work,” according to the statement.
The challenge of installing equipment at sea has made power from offshore turbines expensive, and the lack of any operating offshore projects has hindered the emergence of a U.S. supply chain.
Deepwater Wind is building the first U.S. offshore wind farm near Block Island, in Rhode Island waters. National Grid Plc has agreed to pay as much as 24.4 cents a kilowatt hour, almost triple the 8.5-cent levelized cost of power from onshore wind turbines.
The U.S. Energy Department has designated several zones off the Atlantic coast for potential development, including one in Virginia.
Dominion was awarded a $47 million Energy Department grant for the project in May 2014, and another grant of $4 million in 2012 for preliminary design and permitting efforts.