Perhaps the biggest weather risk to the performance of Dominion’s planned offshore wind project. In all the briefs about mitigating risk, the word hurricane appears once.
by Steve Haner
First published this morning by the Thomas Jefferson Institute for Public Policy. Second of two articles.
In promoting its proposed Coastal Virginia Offshore Wind (CVOW) project, Dominion Energy Virginia has made many specific projections about its costs and performance. The State Corporation Commission is now being advised to convert one or more of them into binding promises, with financial consequences for the utility and its shareholders if the 176 turbines fail to meet expectations.
As noted in previous discussions, including part one yesterday, Dominion’s 2.6 million Virginia customers are fully exposed to any additional costs created if the construction schedule falters, if material costs explode, tax credits disappear, or if the amount of energy provided over the next 25-30 years fails to meet targets. As also previously reported, no other similar project on the U.S. East Coast is structured to put full risk on customers.
Virginia’s General Assembly created it that way. Many of the groups now offering advice on protecting consumers were supporting the bill at the time. But under the “better late than never” rule, their ideas now are worth exploring. The Commission had asked for this advice and got several responses in briefs filed June 24.
The most common suggestion is to create a performance guarantee built around what is called the capacity factor. Even the best power plants do not operate at full capacity 24/7/365. The actual power output divided by the full output potential produces a percentage “capacity factor.” In its application and in hearing testimony, Dominion stated its two-turbine CVOW demonstration project achieved a 47% capacity factor. For this much larger project and longer time period the company projected 42%. Continue reading
