Virginia agency challenges Dominion’s offshore wind deception


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I earlier wrote about the deep deception in Dominion Energy’s proposal to build a huge 2,600 MW offshore wind (OSW) system in Virginia. With 175 massive 800 foot tall generators it is by far the biggest OSW project ever attempted in America. A true monster.

See my https://www.cfact.org/2022/03/11/dominions-deception-hits-new-high-with-offshore-wind/.

Happily the Virginia electric power regulator, the State Corporation Commission (SCC), has now expressed serious concerns with the project. Some of these concerns are along the lines of my article.

At issue is something called LCOE, which stands for “levelized cost of electricity”. At its simplest LCOE is the life cycle cost of a generator system divided by the amount of juice it will generate over that life. It is usually given in dollars per megawatt-hours or $/MWh.

Note that life cycle here runs from design, procurement and construction through O&M and repair, as well as the life ending decommissioning and disposal. For an unbuilt system this is clearly something of a guess, but as with most engineering cost estimates it is worth guessing.

As I pointed out in my prior article, Virginia law turns the LCOE for this monster wind project into an important legal threshold. If it is less that $125/MWh then the project is approved by law. If more then it has to be approved by the SCC as in the public interest, especially that of the ratepayers who will have to pay the billions it will cost.

Dominion came in with a preposterously low LCOE. In response SCC staff have now filed a lengthy critique that questions Dominion’s estimate. They even say that the best guess (of course they do not call it that) might exceed the threshold value.

This is a very big deal because the SCC might assert control over approving this ridiculous project. Or it might not and that is the next big issue, still to come. The three person SCC only has two members at this time and if they split it might not even be able to decide. The project approval wheel is definitely in spin.

Note that the SCC legal analysis of real LCOE is a precedent that might be applicable to other states and countries, should they choose to use it.

The lengthy LCOE analysis is presented as testimony by SCC staffer Katya Kuleshova, a Strategic Planning Specialist. You can find it here: https://scc.virginia.gov/docketsearch/DOCS/6×4%2401!.PDF

To begin with, Dominion uses a simple capacity factor to estimate the total life cycle power generation. In contrast SCC looks at system performance, especially times of too much juice and too little.

If the wind is generating more juice than needed it must be stored, which is a big LCOE cost, or dumped, which means it should not be included in LCOE. No wind means some backup system has to kick in, which is another big LCOE cost.

Then too they left out some big direct costs, like decommissioning and removal, which is especially hard for OSW. Also disposal, which is a growing problem for wind systems, with a growing cost.

There looks to be a lot of other cost and juice issues as well. They even mention the endangered whale problem.

Unfortunately my analysis is somewhat speculative because a lot of the SCC critique obeys Dominion’s demand that it be kept secret. A lot of important stuff is redacted in the public version.

Here is my personal favorite redact, where CVOW stands for Coastal Virginia Offshore Wind

“Staff tested the CVOW Project’s LCOE sensitivities to seven of the LCOE input components, independently. The Project’s LCOE is most sensitive to [BEGIN CONFIDENTIAL]….much black ….[END CONFIDENTIAL]”

It is ironically fitting that they chose to “black out” a lot of the key criticism. Dominion’s overall published Plan for Virginia is sure to bring blackouts. I have been writing about this for a long time.

Additional analysis of the SCC critique can be found in a fine blog post by Jefferson Institute’s Steve Haner at https://www.baconsrebellion.com/wp/scc-staff-dominion-may-exceed-wind-cost-cap/. Haner is my mentor on this stuff but all my errors are mine. Don’t blame him.

It is great that the SCC staff has stepped up to the plate on this monster issue. What happens next is anybody’s guess. Stay tuned to CFACT.

  • David Wojick, Ph.D. is an independent analyst working at the intersection of science, technology and policy. For origins see http://www.stemed.info/engineer_tackles_confusion.html For over 100 prior articles for CFACT see http://www.cfact.org/author/david-wojick-ph-d/ Available for confidential research and consulting.

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