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Tag: Portsmouth Marine Terminal

Clear waters

After receiving its final federal approvals in January, Dominion Energy’s $9.8 billion Coastal Virginia Offshore Wind project remains on track for completion in late 2026, at which point the 2.6-gigawatt project could power up to 660,000 homes.

“CVOW is on budget, on time, and we’re gearing up for construction and excited about getting it to this point,” says Dominion spokesperson Jeremy Slayton.

At the Portsmouth Marine Terminal, Dominion had 24 monopiles — the roughly 272-foot-long foundation posts for the massive 800-plus-foot-tall wind turbines — staged in late February, and 12 additional monopiles were scheduled for an April delivery. Dominion plans to begin installing monopiles 27 miles off the Virginia Beach coast on May 1 and expects to have about half of the 176 posts installed by Oct. 31.

Because of federal protections for endangered North Atlantic right whales, the Richmond-based Fortune 500 utility can’t work on installing the foundations from November through April. With that restriction, Dominion plans to install the remaining foundations in 2025 and begin turbine installation, which can take place year-round, in the 113,000-acre area of the Atlantic Ocean it’s leasing, Slayton says.

The project also includes three offshore substations, manufacturing on which began in fall 2022, although installation of the first substation’s topside foundations is set for late 2024 or early 2025 because the structures require underwater work first.

Onshore, Dominion is working on the electric transmission route and electrical infrastructure that’s scheduled to be operational in late 2025, although some work will continue into 2026. Drilling is set to be complete later this year for two separate portions of the project — the pipes where the offshore cables will come ashore and the underground transmission line.

On Feb. 22, Dominion announced it had reached an agreement with investment firm Stonepeak to sell a 50% noncontrolling stake in the project for nearly $3 billion. The deal, which requires approval from Virginia, North Carolina and federal regulatory agencies, is expected to close by the end of this year.

At the deal’s close, Dominion expects to receive $3 billion, minus a withholding amount of $145 million. If construction costs remain $9.8 billion or less, excluding financing costs, Dominion will get back $100 million from the withholding amount. But if construction costs total more than $11.3 billion, Dominion will not receive any of the withheld amount, and if the project costs reach that threshold, Stonepeak and Dominion would each contribute half of the additional capital costs. 

Meanwhile, the National Legal and Policy Center, a Falls Church-based nonprofit conservative watchdog group, filed a federal lawsuit in March aiming to stop construction of CVOW, claiming it would pose a risk to North American right whales. Dominion said in a statement that the arguments raised in the lawsuit “have no merit.”

Creating a hub

Hampton Roads leaders expect the CVOW project to be a catalyst for economic development in the region.

Each year during construction, CVOW could support 900 direct and indirect jobs, about 60% of which would be in Hampton Roads, according to Dominion. Its ongoing operations could support about 1,100 jobs in the region annually.

However, not all is sunshine and roses.

In November 2023, Siemens Gamesa Renewable Energy canceled its plans to build the United States’ first offshore wind turbine blade manufacturing facility at the Portsmouth Marine Terminal, a $200 million project expected to create 310 jobs. The Spanish-German company said it couldn’t meet “development milestones” to establish the plant, although Siemens Gamesa said it would fulfill its production obligations for CVOW.

Nonetheless, Mike Hopkins, managing director of Fairwinds Landing, a $100 million maritime operations and logistics center in Norfolk, says his company is “very bullish on … offshore wind, and we’re confident this industry is going to take off and Hampton Roads is going to be a hub for offshore wind.”

Construction is underway on an offshore wind monitoring and coordination center for Dominion at Fairwinds Landing, and several other tenants are involved in aspects of the industry. Also, maritime companies operating in the region have announced workforce expansions, like Norfolk-based Lyon Shipyard, which said last year it plans to add 134 jobs as it increases work on commercial ships and vessels servicing the wind farm project.

At the Port of Virginia’s Portsmouth terminal, where the wind farm’s monopiles are received and staged, construction is underway on $220 million in upgrades, expected to be complete by the end of 2025.

Virginia Port Authority Board Chair Aubrey Layne Jr. says the port has to reinforce 72 acres to be used by Dominion, “basically so [the area and facilities] can handle the weight.”

Dominion starting construction on the wind farm in May is “fantastic for the state of Virginia, and our ability to attract suppliers,” adds Matt Smith, Hampton Roads Alliance’s director of energy and water technology.

“As the industry builds out,” he adds, “the things that make Hampton Roads attractive” — such as its port infrastructure, maritime workforce and favorable business environment — “are going to continue to be so.” 

Siemens Gamesa cancels $200M Portsmouth wind blade factory

Amid failing turbine components and financial challenges, Siemens Gamesa Renewable Energy said Friday it has “discontinued” its plans to build the nation’s first offshore wind-turbine blade manufacturing facility at the Port of Virginia’s Portsmouth Marine Terminal.

“Siemens Gamesa will continue to meet our obligations for the Coastal Virginia Offshore Wind project. Siemens Gamesa discontinued plans to build and operate an offshore blade facility in Virginia, as development milestones to establish the facility could not be met,” a spokesperson for the Spanish-German wind turbine company said in a statement. 

The $200 million project, first announced in October 2021, was expected to create 310 jobs in Portsmouth — and also was viewed as a major step toward creating a U.S. offshore wind manufacturing hub in Hampton Roads. The factory was set to support Dominion Energy’s $9.8 billion Coastal Virginia Offshore Wind project 27 miles off the coast of Virginia Beach, and Siemens Gamesa had leased 80 acres at the port’s Portsmouth terminal next to 72 acres leased by Dominion for staging and preassembly of the foundations and turbines for the wind farm.

When completed, the 2.6-gigawatt, 176-turbine wind farm will power 660,000 homes, according to the Richmond-based Fortune 500 utility. Last week, Dominion passed critical hurdles to start construction as planned in the second half of 2024, with a 2026 delivery date. The first foundation posts, or monopiles, for the wind turbines began arriving at Portsmouth Marine Terminal in late October.

The Port of Virginia was notified several weeks ago that the Siemens Gamesa project was not going to proceed, and Siemens Gamesa honored the port’s termination fee, according to Aubrey Layne, board chair for the Virginia Port Authority, which oversees the Port of Virginia.

“Obviously from the economic development perspective for the state, that’s a disappointment,” Layne said Friday. “While we are disappointed, it doesn’t impact our ability to move forward in terms of how we would use the facility. [We’re] more saddened by the fact that it did not work out for offshore wind development with them, and we’ll see if somebody else steps in their place.”

“This announcement has no impacts on our project,” Dominion spokesperson Jeremy Slayton said Friday. “Due to the timing of our project, the proposed facility was not scheduled to manufacture our blades.”

Components for Dominion’s project are being manufactured at another Siemens Gamesa facility in Europe, where the company is making the turbines, consisting of blades, nacelles and hubs.

“We have confidence in Siemens Gamesa, a turbine vendor with decades of experience as the global leader in wind turbine technology,” Slayton said. Dominion locked in the costs and production contract early. Siemens Gamesa made the pieces for the two pilot turbines currently operating off the coast, which Slayton noted “are exceeding expectations” since becoming operational in 2020.

Asked how the cancelled project will impact regional plans for Hampton Roads to become an East Coast manufacturing hub for offshore wind operations, Layne said the port will continue to work with state and local economic development officials to develop the property. “We’ve got other uses for it, so we’re gonna be a good partner,” he said.

The Hampton Roads Alliance also weighed in on the potential impact to Hampton Roads.

“As the offshore wind industry shifts its focus from Europe to the United States, changes in the scope of emerging projects bring with it changes in supplier demand,” Doug Smith, president and CEO of the alliance, said in a statement. “Just last week, however, Dominion was granted approval to build the largest offshore wind farm in America off the coast of Hampton Roads. In addition, the City of Norfolk was awarded a $39 million grant to work with the Miller Group to turn Fairwinds Landing into an offshore wind logistics facility. These announcements put Hampton Roads in a better position than ever to serve as America’s East Coast offshore wind logistics and manufacturing hub and to create thousands of jobs over the next decade.”

Heavy headwinds 

However, Siemens Gamesa has had major economic difficulties in recent months stemming from malfunctioning turbine parts.

The company scrapped its profit guidance in late June, citing a “substantial increase in failure rates of wind turbine components” at its wind division, CNBC reported in July, and in a single day in June, Siemens Energy’s stock fell by 37%.  Specifically, the problems involve turbine platforms, rotor blades and main bearings, Reuters reported. And two weeks ago, Siemens Energy said it was in talks with the German government to secure financial assistance to finish future large projects.

Other wind energy companies have also seen difficulties in recent months, indicating a wider problem in the industry. On Tuesday, a Philadelphia news channel reported that Ørsted, the Danish firm that built Dominion’s first two offshore turbines in 2020, is trying to get out of a $300 million payment to New Jersey after canceling two offshore wind farm projects in southern New Jersey. In late October, Ørsted said it had booked an impairment charge of more than $4 billion against its U.S. offshore portfolio, while announcing its decision to scrap its two New Jersey projects.

Layne said he and port officials have been in regular contact with Siemens Gamesa about the reported turbine issues and concerns with the wind industry.

Slayton said Dominion still plans to help establish a domestic offshore wind supply chain in Hampton Roads, saying that the region is ideally situated to capitalize on the wind industry.

“The offshore wind supply chain in the U.S. is in the development stages,” he noted. “We have that tangible evidence that offshore wind is happening in Virginia, and we are moving forward full steam ahead to start that offshore construction in May of next year.”

Massive foundation posts arrive for Dominion’s offshore wind farm

The first eight monopiles, the wind-turbine foundation posts for Dominion Energy’s $9.8 billion offshore wind farm, arrived at Portsmouth Marine Terminal on Oct. 19, and state officials and Dominion executives celebrated their arrival from Germany Friday.

In a ceremony Friday, Gov. Glenn Youngkin, Dominion Chair, President and CEO Bob Blue and state and local dignitaries marked the arrival of the monopiles, instrumental components in the construction of the planned 176 wind turbines to be erected 27 miles off the coast of Virginia Beach, making up a 2.6-gigawatt wind farm that will power 660,000 homes. 

Dominion’s proposed Coastal Virginia Offshore Wind Project will be the nation’s largest offshore wind farm and aligns with a state mandate that Richmond-based utility Dominion Energy generate all power from carbon-free sources by 2045. The Biden administration also has a goal of reaching 30 gigawatts of offshore wind energy capacity by 2030.

Stephen Edwards, CEO and executive director of the Virginia Port Authority, Gov Glenn Youngkin, Virginia Transportation Secretary W. Sheppard “Shep” Miller III and Dominion Energy Chair, CEO and President Bob Blue signed a monopile Friday at Portsmouth Marine Terminal.
Photo by Robyn Sidersky

The monopiles, which are each about 272 feet long — about the length of a football field  — and 31 feet in diameter, will be driven into the seabed. Each turbine, when fully assembled, will be 836 feet high. 

Construction on the wind farm is set to begin in May, and the turbines will be operational by the end of 2026, Blue said. 

“This is the real beginning of the offshore construction part of the project,” Blue said. “To get the first delivery of them, on time and on budget, is critical for our company, for our customers, for the state, and we’re very excited to have all those partners here,” he said. 

He described seeing the monopiles arrive at Portsmouth Marine Terminal as “a great moment. … Seeing these and seeing the size makes it even more real.”

Massive single vertical steel cylinders, the monopiles are manufactured in Germany by EEW SPC, and the trip to ship the. across the Atlantic takes about 2 1/2 weeks. Eight will be delivered at a time until all 176 arrive in Hampton Roads.  

In late September, the federal Bureau of Ocean Energy Management announced it completed its environmental assessment of the project, a little more than two years after the review began. Approval of the entire project from BOEM is expected in the coming days.

Should the project attain approval, Dominion would still be required to receive BOEM’s final OK for its construction and operations plan, which could occur by February 2024. Virginia’s State Corporation Commission approved the project in August 2022.

Dominion is already operating two wind turbines off the Virginia Beach coast as part of a pilot project. The company said that more than 750 Virginia-based workers, about 530 of whom are in Hampton Roads, are working on the project or with businesses supporting it. Another 1,000 jobs are expected to be created to operate and maintain the turbines.

Port of Virginia

The Port of Virginia again set a cargo record in fiscal year 2022, handling 3.7 million TEUs (20-foot equivalent units) and surpassing its 2021 record by 14.7%. The six-terminal port, which includes facilities in Hampton Roads, Richmond and Front Royal, also continued with its project to widen and deepen its channels to at least 55 feet deep by early 2025, expand rail capacity and modernize the North Berth at Norfolk International Terminals, parts of a $1.4 billion capital campaign. The port was responsible for generating $100.1 billion in ancillary economic impact during fiscal year 2021 and generated 436,667 jobs, according to a 2022 economic impact report conducted by William & Mary’s Raymond A. Mason School of Business in conjunction with Glen Allen-based Mangum Economics.

Illustration by Doug Fuchs
Illustration by Doug Fuchs
Illustration by Doug Fuchs
Illustration by Doug Fuchs
Illustration by Doug Fuchs
Illustration by Doug Fuchs

 

A gust of new jobs

Twenty-seven miles as the seagull flies off the coast of Virginia Beach, two wind turbines, each about 600 feet tall — taller than the Washington Monument — have the ability to generate 12 megawatts of electricity, enough to power 3,000 homes.

In three years, 174 more wind turbines will join them with more than 200 times the power of the first two windmills, enough to power 660,000 homes. They will also be taller than the first two pilot wind turbines, rising 800 feet out of the water.

The 2.6-gigawatt, $9.8 billion offshore wind farm from Richmond-based utility Dominion Energy Inc. is anticipated to support 1,100 direct and indirect full-time jobs across the region, paying $82 million annually in salaries and benefits, according to a 2020 economic impact study commissioned by the Hampton Roads Alliance. Construction is expected to create 900 direct and indirect jobs statewide, paying $57 million in salaries and benefits. And the study says the project could trigger even greater downstream economic growth as new businesses locate in the region to be part of the offshore wind energy supply chain.

To see how Hampton Roads is preparing for this, you have to sweep 50 miles west of the turbines, to Tidewater Community College’s Portsmouth campus, where the school’s 20,000-square-foot Skilled Trades Academy is adding 13,000 more square feet of space.

“We’ve got to get our facilities ready for … this new demand,” says Tamara Williams, TCC’s vice president of workforce solutions. “We are ramping up all of the skilled trades that can support the offshore wind onshore.”

In 2021, TCC added 20 welding booths and other maritime training equipment to the academy. Now, it’s adding more room for HVAC and electrical training. Construction is starting this spring, and new classes will begin in August.

TCC’s expansion is part of a larger effort by businesses, government officials, economic development groups and educators to prepare for an expected increase in demand for an array of skilled and unskilled workers. Dominion estimates a boost in everything from engineering specialists to carpenters, HVAC technicians and tug operators beginning this year and lasting through 2026. Some of these new offshore wind industry jobs will require specialized training. Wind turbine technicians, for example, will need courses from schools certified by the Copenhagen-based Global Wind Organisation (GWO). The courses teach safety measures when working at extreme heights and educate prospective CVOW workers on fire safety and sea survival.

Jeremy Slayton, spokesperson for Dominion, says in an email that the region has the ingredients to make offshore wind a sizeable industry.

“Hampton Roads is well suited to be a supply chain hub for offshore wind projects along the East Coast,” Slayton says. “The region has the first-in-class Port of Virginia, which is ideal to support offshore wind. The port has no overhead restrictions, deepwater channels and an experienced maritime workforce.”

Shawn Avery, president and CEO of the Hampton Roads Workforce Council, says the region has time to train this growing workforce while those two turbines are chugging along in the surf, waiting to be joined by the others.

Already economic activity is percolating because of the project. In June 2022, Viking Life-Saving Equipment, a Danish company that builds safety gear, opened an office in Norfolk. Also in 2022, Seajacks UK Limited, a British company that operates “jack-up vessels” that can lift themselves above sea level to install and maintain offshore platforms, opened an office in Virginia Beach’s Town Center. Finally, the Port of Virginia picked Skanska USA, an American subsidiary of a Swedish company, to perform a $223 million redevelopment of 72 acres of the Portsmouth Marine Terminal as a staging area for components of the wind turbines.

Many of the new jobs being created for the offshore wind industry will be familiar to Hampton Roads. Kosal Sarou, who oversees hiring of skilled workers for Skanska’s Portsmouth Marine Terminal redevelopment, ticks off the kinds of workers needed for the project: carpenters, concrete finishers and crane operators.

However, some of the new positions will need workers with training not widely available in Hampton Roads. Right now, GWO-certified courses for technicians and other workers who build and maintain the turbines are scarce in the region. Currently, the only training provider is ENSA North America in Norfolk, which offers four classes, ranging from a basic climbing course for a worker who might have to climb a turbine occasionally to an expanded wind-turbine skills class that includes rescue and first aid instruction. TCC plans to provide GWO training starting in January 2024, Williams says.

The big challenge, Avery says, is to grow a workforce with a mix of skills so Hampton Roads can meet the surge in hiring and “we are not stealing from one industry to … fill the other.”  

Skanska wins $223M contract for offshore wind farm prep

New York-based Skanska USA won the $223 million contract to redevelop the 72 acres of the Portsmouth Marine Terminal that Dominion Energy Inc. will use as a staging area for its $9.8 billion Coastal Virginia Offshore Wind project.

The company announced the award on Tuesday. The CVOW calls for the construction of 176 wind turbines 27 miles off the coast of Virginia Beach by 2026, and the State Corporation Commission approved Dominion’s application in August.

“Skanska is honored to work on an innovative and sustainable project that supports the state’s clean energy goals and reflects our value to build for a better society,” Brook Brookshire, senior vice president of Skanska civil operations, said in a statement.

Dominion Energy Inc. and the Port of Virginia signed a lease agreement for the 72 acres in August 2021. Dominion will use its portion of the 287-acre terminal as a staging and pre-assembly area for the foundations and 800-foot wind turbines that it will use in the project.

Port of Virginia Spokesperson Joe Harris said, “It’s going to be a laydown area. There’ll be some assembly there, and there’s going to be a blade finishing facility on site, so it’s a big project, and it’s going to be a great use of that terminal and it’s going to be good for the Port of Virginia, but it’s also going to be good for all of Virginia.”

Turbine installation is expected to begin in 2024. The project’s expected completion is in 2026, and which point it will power up to 660,000 homes.

As part of the contract, Skanska will improve 1,500 feet of an existing 3,540-foot wharf. The company will also build three heavy lift berths, a wind-turbine generator delivery berth, a wind-turbine generator loadout berth and the berth for the steel tube monopiles (turbine foundations).

Skanska will also dredge a channel and access area and will strengthen soils and surfaces so they can handle heavy turbine components. The company will also install lighting, stormwater collection systems, fencing and other structures.

Skanska previously worked with the Virginia Port Authority on a wharf expansion project and renovation at the Norfolk International Terminals.

The U.S. subsidiary of the Swedish parent company, Skanska USA has 30 offices across the country with 7,300 employees. Globally, Skanska has more than 30,000 employees.

Tilting toward windmills

Siemens Gamesa Renewable Energy S.A.’s October 2021 announcement that it will build the nation’s first offshore-wind blade factory at Portsmouth Marine Terminal (PMT) has put Hampton Roads on a trajectory to become a supply chain hub for the country’s nascent offshore-wind energy industry.

The Spanish wind turbine company is investing $200 million to build the factory, including more than $80 million to construct buildings and install equipment on an 80-acre leased site at PMT. Upon completion in early 2023, the factory will be able to produce patented Siemens Gamesa Offshore IntegralBlades for 100 wind turbines annually.

That includes providing blades for the 176 turbines Dominion Energy Inc. plans to erect in federal waters 27 miles off the Virginia Beach coast for its 2.6-gigawatt, $9.8 billion Coastal Virginia Offshore Wind (CVOW) project. Installation of the wind turbines is expected to begin in 2024. When completed in 2026, the CVOW project will be the nation’s largest offshore wind farm, powering up to 660,000 homes with clean, renewable energy.

Siemens Gamesa is partnering with Dominion on the offshore wind farm, and the blade factory will be up and running in time to support deliveries to the project. Additionally, about 50 of the 310 jobs planned at the factory will be service technician roles to support the CVOW farm. Overall, 1,100 direct and indirect jobs are expected to come to Hampton Roads from Dominion’s wind farm, along with almost $210 million in economic activity. Other wind energy companies are also looking to establish operations in Hampton Roads.

Dominion also is leasing 72 acres at the 287-acre terminal over 10 years to stage and preassemble the foundations and massive, 800-foot-tall wind turbines. And, Danish offshore wind developer Ørsted is leasing 1.7 acres at PMT to stage equipment through at least 2026, with the option to expand to 40 acres.

“This location at the Port of Virginia is second to none,” Dominion Chair, President and CEO Robert Blue said in August 2021. “It has deep water access, no overhead restrictions, a strong, experienced maritime workforce and sufficient space for these large wind infrastructure components. It is perfectly situated to serve the Virginia offshore wind project and grow the domestic supply chain needed to complete other offshore wind projects in the United States.”

The combination of PMT’s facilities, proximity to the CVOW project and state incentives for site improvements factored into Siemens Gamesa’s decision to come to Virginia, says Steve Dayney, the company’s head of North American offshore wind operations. “Siemens Gamesa carefully considered all options for U.S. blade localization. Virginia moved swiftly to create a positive environment focused on spurring development of offshore wind in a competitive market.”

“Hampton Roads has incredible advantages for offshore wind,” says industry consultant Jennifer Palestrant, formerly chief deputy for the Virginia Department of Energy. Photo by Mark Rhodes
“Hampton Roads has incredible advantages for offshore wind,” says industry consultant Jennifer Palestrant, former chief deputy for the Virginia Department of Energy. Photo by Mark Rhodes

Dayney adds that the blade facility is the first step in developing PMT into an offshore wind hub. “We believe a local supply chain is the right choice for offshore wind in the U.S.” he says. “The establishment of a blade manufacturing facility is a major investment. Siemens Gamesa will look to potentially expand the facility if awarded future projects in the region and create additional jobs in the future.”

State and local boosters have touted Hampton Roads as the ideal supply chain hub for the offshore wind industry.

“Hampton Roads has incredible advantages for offshore wind,” says Jennifer Palestrant, former chief deputy for the Virginia Department of Energy and now an offshore wind consultant. As she points out, the region boasts a deep, wide harbor free of air-draft restrictions from bridges and other overhead structures, not to mention an abundance of waterfront industrial sites with lay-down room for the large components used in wind projects.

Plus, she adds, the local maritime workforce is one of the best in the nation. “People ask me what we do well here in Hampton Roads, and I tell them large-scale maritime steel.”

About 90% of the skills required to work in offshore wind are comparable to those in other local maritime industries such as shipbuilding. To maximize those skills, the state has launched training programs at Virginia Beach’s Centura College, Norfolk’s Mid-Atlantic Maritime Academy and Martinsville’s New College Institute, all of which provide wind-related training courses certified by the Global Wind Organisation. Community colleges and universities also offer similar courses.

Dominion also expects its $500 million, 472-foot wind component installation vessel, Charybdis, to help establish Hampton Roads as a supply chain hub. The nation’s first offshore wind vessel built in compliance with the Jones Act, which requires goods shipped between U.S. ports to be carried aboard American-built ships, Charybdis will be homeported in Hampton Roads when it enters service in 2023. As of March, shipbuilders in Brownsville, Texas, were about halfway done building the vessel.

“It starts to create a domestic supply chain that can serve nationally,” says Dominion spokesperson Jeremy Slayton. “It will maximize local economic development opportunities.”