First in a series on Virginias transition to a carbon-free electric grid. Tomorrow: What role will utility-scale solar projects play?

Maybe, if you squint really hard and the skies are clear, you might be able to convince yourself that you see them, out on the horizon: two turbines spinning far offshore of Virginia Beach.

You cant, of course the distance to the Dominion Energy-owned offshore wind outpost is too great. Bill Murray, a senior executive with Dominion, describes it this way: Imagine, he says, that the USS Wisconsin, a World War II-era battleship now docked at Norfolk, were to be beached at Sandbridge and from there fire its 16-inch guns, capableof traveling 21 miles. Those guns could not hit these turbines, said Murray.

Until recently, Virginias offshore wind dreams seemed to many an equally long shot. Dominions two test turbines, known as the Coastal Virginia Offshore Wind Pilot, were a decade in the making. During that time offshore wind boomed in Europe and China, but the U.S., preoccupied with the glut of natural gas unlocked by the shale revolution, made few inroads into the technology. Rhode Islands Block Island wind farm was the nations first offshore wind venture in state waters; Dominions CVOW pilot 27 miles off the coast is the first in federal waters.

Today, however, U.S. enthusiasm for natural gas is wavering, and offshore wind has seen a dramatic upswing in interest. Roughly a dozen major offshore wind projects have been announced along the East Coast with the potential to provide 30 gigawatts of energy to residents of the Atlantic seaboard. Much of the activity has occurred in the maritime states of New England and the upper mid-Atlantic, especially Massachusetts, New York and New Jersey. The farther south you go, the less the idea seems to have caught on.

Virginia is a major exception. Here, offshore wind has become the most ambitious and expensive part of the states plan to meet Democratic Gov. Ralph Northams goal of achieving a carbon-free electric grid by 2050. Last December, Dominion announced plans to build the nations largest offshore wind farm in its federal lease area off Virginia Beach at an estimated cost of $8 billion. Wind developer Avangrid, which is behind the Kitty Hawk project in North Carolina, is also eyeing the state as a possible destination for its power, although no contracts have been signed.

Electrically, the easiest place for us to connect is in Virginia Beach, said Eric Thumma, Avangrids senior director of new business for offshore wind.

When Democrats took the majority in both houses of the General Assembly in 2020, they came in with the desire to remake Virginias electric grid. Offshore wind quickly became the most controversial part of their proposals due to its cost and the profits the politically powerful Dominion stood to make from its development. The Virginia Clean Economy Acts declaration that 5.2 gigawatts of the resource more than all of the states nuclear units and its largest gas-fired plant combined is in the public interest provoked a bitter fight that continues to divide Democrats.

Tensions only increased after a ProPublica-Richmond Times-Dispatch investigation earlier this fall uncovered a last-minute change to the law that authorizes Dominion to spend an extra $2.5 billion on its offshore enterprise. Depending on who you ask, the VCEA is either another utility giveaway or a vital part of a clean energy portfolio that will act as an engine for economic growth.

Much of the uneasiness over offshore wind comes down to its cost. Because Dominion is in the generation as well as transmission and distribution business, it reaps profits from building things and the bigger the project, the greater the profits. At an estimated $8 billion, CVOW will be the largest its ever undertaken. A second wind farm of equal size would add billions more to the bottom line.

Offshore wind is necessary, Dominion executives say. We simply cant rely on solar alone or energy efficiency alone to get us to a carbon-free grid, said Katharine Bond, the companys vice president of public policy and state affairs. Industry experts agree wind is an ideal complement to solar because it tends to peak at night and in the winter, when solar is at its lowest. And for Dominion, whose Virginia territory is less well suited to onshore wind than the mountaintop ridges enjoyed by Appalachian Power, that leaves offshore wind as the primary solution.

A carbon-free grid has to be a more diverse grid because of the intermittency of renewables, said Murray. Theres a tendency a little bit in energy policy to say, OK, solar right now is the cheapest renewable, lets just do all solar. And more incremental energy between noon and five is at some point not helpful.

But while few supporters of weaning Virginias grid off carbon think offshore wind shouldnt be part of the portfolio, many caution that Dominion shouldnt be given carte blanche on spending.

Regulators ability to review offshore wind costs remains unclear. The VCEA includes language indicating the commission should sign off on CVOW costs unless certain specific conditions arent met, but even State Corporation Commissioners seemed unsure during hearings this October about how restrictive the law is. Whats the play in the joints that is left after need and cost have been essentially predetermined? Judge Mark Christie asked at one point.

Still, many clean energy advocates say regulators retain ultimate oversight. The Clean Economy Acts language favoring renewables is an expression of the General Assembly that they support this type of generation technology, but its not a mandate for the commission to approve any particular project, energy attorney Will Reisinger told regulators during the same hearings. In an extended legal argument touching on the laws history and wording, Southern Environmental Law Center attorney Will Cleveland said the commission retains ultimate authority over whether a specific proposed offshore wind projects costs are reasonable and prudent.

Whether regulators will agree is a question several months from being answered.

Energy issues, of course, have always been intricately intertwined with economic ones. Dominion has been in the economic development business for decades, said Murray. Electric utilities are for economic development. In a way its altruistic, in a way its self-serving because any type of economic development plugs into the grid.

But offshore wind takes the connection to a new level. Virtually all of the discussion and work surrounding Virginias wind goals center not on energy, but on the economy.

Part of that focus is due to the high threshold for entry into offshore wind development. Because the investments required for the technology are so high and only a limited number of government leases for sites are available, the industrys pool of players is small.

In Virginia right now, Dominion is at the helm. The utility is the only company that owns a lease in federal waters off the states coast. And unlike other utilities to the north, which have relied on non-utilities to develop projects that they then acquire power from, Dominion is actively involved in not only developing but building offshore wind, and it has indicated in its long-range planning that its interested in developing more than the CVOW project, and potentially all 5.2 gigawatts of the offshore target.

Still, other companies like Avangrid and Danish firm rsted, which partnered with Dominion on the CVOW pilot, have signaled strong interest in Virginia. rsted has leased 40 acres at the Portsmouth Marine Terminal, and Thumma said Avangrid, which opened an office in Virginia Beach this fall, is open to lots of different opportunities. Siemens Gamesa has also publicly said Hampton Roads is among the locations its considering for a turbine manufacturing facility.

One of the key elements of getting a project done is making sure you have an offtaker, said Bruce Burcat, executive director of the Mid-Atlantic Renewable Energy Coalition. And what the VCEA does, just like similar types of statutes in states like Maryland or New Jersey or Delaware or Pennsylvania, is there is now a market for the offtake of the energy.

Still, all eyes are on Dominion. How the utility navigates the state and federal permitting processes it has to undergo to get the full CVOW project underway will provide a template for other companies interested in Virginia who may be wary to put down money in these early months.

Theres going to be a reticence to invest until we actually see projects and steel in the waters, said Thumma.

The VCEA doesnt limit wind development to offshore. Onshore wind is folded into the 16,100 megawatt and 600 megawatt targets set for Dominion and Appalachian Power to meet by 2035, and both welcomed proposals for onshore projects this summer.

Still, unlike the flat and windy Midwest, Virginia is less suited to onshore wind, with the most promising areas located along its western ridges in Appalachian Power territory. One of the biggest challenges with Virginia and onshore wind is the wind resources are located in the most difficult terrain, said Director of Mines, Minerals and Energy John Warren. Theres a limited amount of project sites that really fit for large utility-scale onshore wind. To date, only one, the Rocky Forge project developed by Apex Clean Energy, has made it through the permitting process in the commonwealth. Utility executives are expecting more to come. In October, Dominion Director of Integrated Resource Planning Glen Kelly told the SCC that the utility is very open to onshore wind and that it expects the resource to have a more robust presence in the utilitys future planning.

Dominion, for its part, is confident. Pointing to its successful navigation of the federal permitting process for the CVOW pilot a process no other company has completed Dominion executive Bond said the utility has a set of experiences that others in the United States dont necessarily have. With that experience, Dominion is moving swiftly to develop the full CVOW project. After months surveying its lease area and taking core samples to determine how the massive turbines should be engineered, it intends to file its required construction and operations plan with the Bureau of Ocean Energy Management this December.

The company is also hoping to skirt some of the environmental problems other high-profile projects like Vineyard Wind off Massachusetts have encountered. CVOWs location 27 miles off the coast reduces concerns for birds, said Bond. It limits fisheries impacts as well, although the states 19 black sea bass and conch fishermen remain concerned about how closures due to construction and the presence of 188 turbines, three substations and extensive cabling will affect their livelihood.

The real challenge that were running into is theres not a great roadmap, said Todd Janeski, a fisheries coordinator with the Virginia Coastal Zone Management Program. Ultimately, how this project does move forward here will inform other efforts down the road.

Ironically, then, with Dominion preparing to file its plans with federal regulators, most of the offshore wind action in Virginia is happening on dry land.

These preparations are all about the economy. Because offshore wind turbines require manufacturing on a monumental scale and the U.S. has no supply chain in place to build them, states from Massachusetts to Virginia are scrambling to position themselves as offshore wind hubs that can not only operate new wind farms but manufacture and maintain the parts that run them.

Were trying to create an industry from scratch, said Doug Smith, president and CEO of the Hampton Roads Alliance, an economic development group closely involved in bringing offshore wind to Virginia.

Local and state officials, as well as regional business groups, think Hampton Roads is one of the best candidates for the role. The region possesses a deepwater port that, thanks to the U.S. naval base at Norfolk, isnt obstructed by bridges that could block vessels ferrying turbine components out to sea. The Navys presence has also fostered a robust manufacturing sector thats oriented toward shipbuilding but could easily expand into offshore wind. And Dominion has plans underway to develop a Hampton Roads-based vessel capable of installing wind turbine components a major hole in the U.S. portfolio.

Theres no harbor or port that has the existing infrastructure and workforce that Virginia has, said Chris Gullickson, director of economic development for the Port of Virginia.

Virginia has already committed significant resources to convincing the fledgling industry that Hampton Roads is the ideal site for a hub, though it has also reached an agreement with North Carolina and Maryland to collaborate in promoting the Southeast and Mid-Atlantic as a regional center for the new energy source. The states 2020 budget included $40 million for upgrades at the Portsmouth Marine Terminal, primarily dealing with soil stabilization and reinforcement that will ensure the port can handle parts of turbines that will stand taller than the Washington Monument and have blades longer than seven football fields placed end to end.

This is the last small piece that we need that will make a huge difference to the industry, said Jennifer Palestrant, chief deputy of the Department of Mines, Minerals and Energy.

Meanwhile, the 2020 General Assembly established a new Division of Offshore Wind within the department that Palestrant said aims to be the convener for how we develop offshore wind and allotted $375,000 to stand the new office up. Among the new partners for the division? The Hampton Roads Alliance, which this September was awarded more than half a million dollars in state GO Virginia grant funds to help develop the offshore wind supply chain. The funding followed the groups establishment this summer of an office in Frankfurt, Germany, that will allow the Alliance to explore partnerships in Europe, where Smith said the major players of the industry are. One consultancy, PM&P, has been working with the Alliance to develop a strategic plan for how Hampton Roads can attract offshore wind manufacturers.

Along the East Coast, theres going to be a limited number of hubs around the supply chain, said Smith. We want to really understand what that looks like.

One thing is clear: if Hampton Roads becomes one of the East Coasts top offshore wind hubs, Virginias looking at a lot of new jobs. One study by Mangum Economics estimates that for every gigawatt of offshore wind developed, Virginia could see 5,200 new jobs annually.

Most of those are likely to be local to Hampton Roads. The VCEA sets no firm quotas for the hiring of Virginia workers for wind farms, although it does require Dominion to draft a plan for how it will use both local workers and veterans in building out its project a provision Southeastern Wind Coalition President Katharine Kollins said is nebulous but important.

Still, she pointed out, offshore wind energy production is labor intensive.

A solar farm takes care of itself, she said. An offshore wind project needs daily operations and maintenance on at least one of the turbines. Youve got folks out there every single day who are ensuring these things are running.

The more manufacturing operations Virginia attracts, the more that workforce is likely to grow as other states build out their projects.

Its not just our project. If you look at the queue, the pipeline of projects up and down the East Coast continues to grow, said Dominion spokesperson Rayhan Daudani. You develop that workforce not just to construct the 2.6 gigawatts and then have the ongoing (operations and maintenance), but all up and down the East Coast there will be the opportunity to train them here, hire them here.

One potential game changer would be the development of Dominions offshore wind vessel. Currently the only ships capable of installing offshore wind infrastructure are European, but the federal Jones Act bars foreign ships from carrying shipments between U.S. ports. If the utility can get its vessel in operation by 2023 as planned, it would prove a major inducement for manufacturers to locate near its home base of Hampton Roads.

Training, of course, will be necessary. Theres only a handful of people in Virginia that are qualified to even step foot on a turbine, said Paul Olsen, executive director of programs and partnerships at Old Dominion University, which has partnered with DMME to help advance offshore wind in the state. We need to create hundreds of skilled positions.

Officials are looking to Virginias community and technical colleges, as well as manufacturers, to help fill the gap. In October, Gov. Northam announced the creation of a new training alliance to offer certifications for offshore wind work. Partners include Martinsvilles New College Institute, Centura College and Norfolks Mid-Atlantic Maritime Academy. And officials like Palestrant said they expect skills from Hampton Roads existing maritime industry to be easily transferable.

The technical colleges are already very very interested in providing programs for students to then go straight into these jobs, said Kollins. Once we see the development really start to take place youre really going to see more and more students entering these courses knowing theres a job for them at the end of the day.

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With offshore wind, Virginia hopes a 21st-century manufacturing boom will offset a hefty price tag - Virginia Mercury