RICHMOND, Va. (AP) — Eight energy companies will bid Sept. 4 on a lease for a vast expanse of ocean off Virginia's coast set aside for the development of wind farms.
The Bureau of Ocean Management on Monday announced the scheduled auction of 112,800 acres on the Outer Continental Shelf, 23.5 miles east of Virginia Beach. It is a critical step in establishing what would be among the first offshore wind turbines in U.S. waters, possibly rising above the ocean surface by the end of the decade.
The companies that are in the running for the new energy industry include the state's largest utility, Dominion Virginia Power, and Energy Management Inc., developer of the Cape Wind project in federal waters off Massachusetts' Cape Cod. It was the nation's first offshore wind project to be approved.
The entire Virginia lease area has the potential of generating 2,000 megawatts of electricity, enough energy to power 700,000 households.
"Responsible commercial wind energy development has the potential to create jobs, increase our energy security and strengthen our nation's competitiveness," Interior Secretary Sally Jewell said in a statement announcing the auction date.
Following the auction, which will involve the entire leasing area, the winning bidder will have about five years to submit proposed design and construction plans.
"I would think that 7-8 years out is when you might see things being built," said Walter Cruickshank, BOEM's deputy director. "It can go faster. It's going to depend on the company and how quickly it brings its design together and gets all its pieces together."
Gov. Bob McDonnell, who has promoted energy development, called the lease auction "an exciting and significant step" in the advancement of his "all-off-the-above" energy strategy. He has also lobbied for offshore gas and oil exploration.
"This will result in millions of dollars in industrial activity and the creation of many new high-skilled jobs in our state," McDonnell said in a statement.
Studies have estimated that the development of an offshore wind industry would create in the range of 10,000 jobs in Virginia. The U.S. has virtually no manufacturing base for the big components needed to withstand the ocean environment because much of the industry has been developed elsewhere such as in northern Europe and China.
Cruickshank said a big hurdle for any energy company will be securing the financing to build and site huge turbines that will capture ocean winds for energy.
"This is something new for the United States," he said in an interview. "It's going to be a challenge for these folks to get the financing together for these projects."