Moments after Siemens Gamesa announced that it would build a $200 million offshore wind blade finishing facility at the Port of Virginia, the first of its kind in the U.S., Energy Secretary Jennifer Granholm playfully nudged the company to do even more to support a burgeoning domestic supply chain.
"We're talking about blades installed here, we want the manufacturing here, too. No pressure or anything," Granholm said. "This would be a great place for that!"
Granholm acknowledged that the U.S. offshore wind market is lagging its counterpart in Europe, where 25 GW of offshore wind capacity has been installed, compared to just 42 MW in the U.S. Much of the disparity can be attributed to the immaturity of the U.S. offshore wind supply chain.
The Biden administration has a goal of deploying 30 GW of offshore wind by 2030, a target IHSMarkit analysts say will be difficult to reach because of "a lack of manufacturing facilities, specialized U.S.-flagged installation and service vessels, dedicated ports plus poor power transmission infrastructure."
The Siemens Gamesa blade finishing facility will be part of a larger offshore wind hub at the Port of Virginia, alongside partners Dominion Energy and Orsted. The hub will support the production of Dominion's 2.6 GW offshore wind project 27 miles off the coast of Virginia Beach, which is currently operating as a two-turbine test pilot. But the Siemens Gamesa announcement could be a turning point -- one that Steve Dayney, the company's head of offshore wind in North America, called an important first step to reach the 30 GW by 2030 goal.
The Siemens Gamesa blade finishing facility will be part of a larger offshore wind hub at the Port of Virginia, alongside partners Dominion Energy and Orsted. The hub will support the production of Dominion's 2.6 GW offshore wind project 27 miles off the coast of Virginia Beach, which is currently operating as a two-turbine test pilot.
"We selected this site because of its near and longer-term potential, providing that we secure sufficient volume of projects to be able to produce components for those projects," Dayney said, calling Monday's announcement one of the highlights of his career.
U.S. Dept. of Energy Secretary Jennifer Granholm, Dominion Energy CEO Robert Blue, and Virginia Gov. Ralph Northam will participate in a "special announcement on offshore wind" Monday in Portsmouth, Va., according to a press release. (Courtesy: Dominion)Dominion Energy, meanwhile, is building the first Jones Act-qualified wind turbine installation vessel in the U.S. to support the Coastal Virginia Offshore Wind project. The $500 million, 472-foot vessel is being constructed in Brownsville, Texas.
Dominion Energy CEO Robert Blue highlighted the value of bringing together international offshore wind leaders Siemens Gamesa and Orsted together at the Port of Virginia site.
"This is a new industry in the United States but it's not new to the world. We've learned a lot from the pilot project that we'll be able to take advantage of on (the larger 2.6 GW project)," Blue told Renewable Energy World.
.@GovernorVA announces @SiemensGamesa as a partner on the Coastal Virginia Offshore Wind, joining @DominionEnergy and @OrstedUS. Siemens Gamesa will build a blade finishing facility at the Port of Virginia in Portsmouth, Va. @REWorld #energytwitter pic.twitter.com/iCAqNrNfZA
— John Engel (@EngelsAngle) October 25, 2021Clean energy tax credits for offshore wind deployment in President Biden's "Build Back Better" plan, and additional credits for domestic manufacturing, will further incentivize expansion of the U.S. supply chain. Congress is currently negotiating terms of the $3.5 trillion budget reconciliation bill and $1.2 trillion bipartisan infrastructure bill.
The size of offshore wind turbines, meanwhile, requires a strong manufacturing footprint near the installation site to reduce project costs. Granholm said the Port of Virginia has a natural advantage to meet the demand for offshore wind manufacturing along the east coast of the U.S.
"The next step would be getting the full blade manufacturing here, and then the full tower manufacturing, and then the nacelle manufacturing," Granholm said. "If we get (the Build Back Better plan) passed, (companies) will choose to come here as opposed to building in Europe. When they choose to come here, they're going to come to a place where it makes sense logistically."
Once completed in 2026, Dominion Energy's Coastal Virginia Offshore Wind project will produce enough renewable energy to power up to 660,000 homes.
