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Virginia’sOffshoreWindSupplyChainandServiceIndustryOpportunityJuly25,2018
CommonwealthofVirginia--DepartmentofMines,Minerals&Energy Virginia'sOffshoreWindSupplyChainandServiceIndustryOpportunity|July25,2018 2
Agenda
• Virginia’sOpportunity• Virginia’sAdvantages• Virginia’sOffshoreWindHistory• Collaboration• SupplyChainandServiceIndustry• VirginiaOffshoreWindTeam• GetInvolved
Virginia’sOffshoreWindSupplyChainandServiceIndustryOpportunity
Virginia’sOpportunityOffshoreWindSupplyChainandServiceIndustry
CommonwealthofVirginia--DepartmentofMines,Minerals&Energy Virginia'sOffshoreWindSupplyChainandServiceIndustryOpportunity|July25,2018 3
OpportunityBackground
• TheoffshorewindenergymarketisjustemerginginNorthAmerica.
• Withapotentialbuild-outofatleast20,000MWofinstalledcapacity(or2,000-3,000windturbines)alongtheEastCoastoverthenexttwodecades,Virginiaiswell-positionedasaprimelocationfortheoffshorewindsupplychainandserviceindustry.
• Asthedemandforwindenergyincreases,expertspredictthatover14,000jobswillbecreatedintheVirginiaintheconstruction,maintenance,manufacturingandotherservice-relatedindustries.
• Offshorewindcomponentsinclude:blades,generators,nacelles,towers,foundations,cablesandconstructionstaging.
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OffshoreWindSupplyChainandServiceIndustry
TheOpportunityinVirginiaTheVirginiaOffshoreWindTeam,ledbytheDepartmentofMines,MineralsandEnergy,recognizesthelong-termeconomicdevelopmentopportunitytocapitalizeontheCommonwealth’slogisticalandworkforceadvantage.
Infact,theVirginiaOffshoreWindTeamregularlyhostssitetourswithgloballyrecognizedoffshorewinddevelopers,procurementandlogisticsexperts,Europeanfoundationfabricatorsandotherpotentialsupplychainbusinesses.
Opportunity
“HamptonRoads’unmatchedportinfrastructureandhigh--qualitymaritimeworkforcemaketheregionanideallocationforoffshorewindenergydevelopment.Virginiashouldbetheprimelocationfortheoffshorewindindustry,fromthesupplychaintothefullbuild-outofouroffshorewindassetsoffthecoast.”—GovernorRalphNortham
CommonwealthofVirginia--DepartmentofMines,Minerals&Energy Virginia'sOffshoreWindSupplyChainandServiceIndustryOpportunity|July25,2018 5
Opportunity
“Virginiaispoisedtocapitalizeonthestartofa50--yearindustrythatwillstretchupanddowntheEastCoast.Fromalogisticsstandpoint,locatingtheoffshorewindsupply-chaininVirginiajustmakessense.”—SecretaryofCommerceandTradeBrianBall
CommonwealthofVirginia--DepartmentofMines,Minerals&Energy Virginia'sOffshoreWindSupplyChainandServiceIndustryOpportunity|July25,2018 6
Virginia’sAdvantages
CommonwealthofVirginia--DepartmentofMines,Minerals&Energy Virginia'sOffshoreWindSupplyChainandServiceIndustryOpportunity|July25,2018 7
Advantages
Virginia'sOffshoreWindSupplyChainandServiceIndustryOpportunity|July25,2018 8CommonwealthofVirginia--DepartmentofMines,Minerals&Energy
Virginia’sHamptonRoadsregionoffersanumberofuniquecompetitiveadvantagesoverotheroffshorewindbusinesslocationsalongtheEastCoast.
#1Pro-BusinessClimate
#2Strategic
GeographicLocation
#3UnmatchedPortInfrastructure
#4Congestion-FreeNavigation
#5ProgressiveEnergy
PolicyStance
#6America’sLargest
ShipbuildingIndustry
#7ZeroAirDraftRestrictions
#8High-Quality
MaritimeWorkforce
#9AbundantQuayside
RealEstate
Advantages
Virginia'sOffshoreWindSupplyChainandServiceIndustryOpportunity|July25,2018 9CommonwealthofVirginia--DepartmentofMines,Minerals&Energy
#1:Pro-BusinessClimate
CNBCranksVirginiaasthefourthtopstateinthenationandthekirstontheEastCoastforbusiness.Virginialeadsthewayineducationandworkforcedevelopmenttosupportitsthrivingeconomy.
Advantages
Virginia'sOffshoreWindSupplyChainandServiceIndustryOpportunity|July25,2018 10CommonwealthofVirginia--DepartmentofMines,Minerals&Energy
#2:StrategicGeographicLocation
WithcommercialoffshorewindleaseslocatedoffthecoastsofNJ,DE,MD,VA,andNCatatraveltimeoflessthan20hoursbyinstallationvesselstravelingat10knots,Virginia’sportassetsarestrategicallylocatedintheMid-Atlanticwithdirectopenaccess.
Advantages
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#3:UnmatchedPortInfrastructure
AsthesecondlargestontheEastCoastintonnageandthethirdlargestincontainervolume,Virginia’sportshavetheabilitytohandleanytypeofcargo.Virginiaisoneofthefewportfacilitiesthatcanoffer“pluginandplay”facilitiestothesupplychain.
Advantages
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#4:Congestion-FreeNavigation
HamptonRoadsenjoysopenshippingchannelsandnavigationalklexibilityeliminatingmaritimecongestionasaconcern.ThePortofVirginiaisthedeepestportontheEastCoastandrecentlygainedapprovalforadredgingprojectwilltakethechannelsto55feetdeepandwidentheminselectareastoallowfortwo-waytrafkicofultra-largecontainerships.
Advantages
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#5:ProgressiveEnergyPolicyStance
Inabipartisanfashion,Virginia’slegislaturepassedtheGridTransformationandSecurityActin2018,whichdeems5,000MWofsolarandwindenergygenerationtobeinthepublicinterest.
Advantages
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#6:America’sLargestShipbuildingIndustry
HamptonRoadsishometothelargestshipbuildingmarketintheUnitedStates.Thisprovidesnumerousadvantagesinexistingphysicalandworkforceassets.
Advantages
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#7:ZeroAirDraftRestrictions
Virginiaportfacilitieshavedirectaccesstoseawithnooverheadobstaclestoimpedetheshippingoflargeanduprightinfrastructureandcomponents,anadvantagethatdifferentiatesitfromeveryotherEastCoaststate.
Advantages
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#8:High-QualityMaritimeWorkforce
HamptonRoadsboastsacivilianandmilitarymaritimelaborforceunmatchedbyanyotherEastCoaststate.Itsproximitytothelargestnavalbaseintheworldpresentstheopportunitytohireretiringmilitarypersonnelforhigh-skilledoffshorewindjobs.
Advantages
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#9:AbundantQuaysideRealEstate
Virginia’sportsofferexistingdockcapacityandampleon-watermarshalingareas.TheVirginiacoastlineisgeographicallyrichwithwaterfrontpropertiesanddevelopmentorredevelopmentopportunities.
Virginia’sOffshoreWindHistoryActivitiesinVirginia–Past&Present
CommonwealthofVirginia--DepartmentofMines,Minerals&Energy Virginia'sOffshoreWindSupplyChainandServiceIndustryOpportunity|July25,2018 18
Virginia’sOffshoreWindHistory
Virginia'sOffshoreWindSupplyChainandServiceIndustryOpportunity|July25,2018 19CommonwealthofVirginia--DepartmentofMines,Minerals&Energy
VirginiaOffshoreWindResearch&Development
• VirginiahastheonlyresearchleaseforoffshorerenewableenergyawardedbytheBureauofOceanEnergyManagement(BOEM).
• CoastalVirginiaOffshoreWind(CVOW),atwo-turbine,12MWdemonstrationprojectisslatedfordevelopmentinthis2,135-acreresearchlease(currentlyinthekinalstagesofBOEMapprovalwitha2020targetcompletiondate).
• Thisdemonstrationprojectistheprecursortothefull-scalebuildoutofthe112,800-acreWindEnergyArea(WEA)locatedapproximately23.5milesoffshorefromtheVirginiaBeachcoastline.
• ThefederalleaseforthisWEAwasexecutedinNovember2013withDominionVirginiaPower,whichisaninvestor-ownedutility.
• Thefullbuild-outofthisWEAhasthepotentialtoproduceupto2,000MWofwindgeneration.
Virginia’sOffshoreWindHistory
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Phase 1 CVOW Lease Area
(2,135 acres) Virginia Commercial Lease Area
(112,800 acres)
ResearchandCommercialLeaseAreas
Virginia’sOffshoreWindHistory
Virginia'sOffshoreWindSupplyChainandServiceIndustryOpportunity|July25,2018 21CommonwealthofVirginia--DepartmentofMines,Minerals&Energy
VirginiaCoastalEnergyResearchConsortium(VCERC)• VirginiaGeneralAssemblycreatedVCERCin2007toserveasaninterdisciplinarystudy,researchandinformationresourcefortheCommonwealthoncoastalenergyissues.
• Itprovidestheresearchanddevelopmentrequiredforthecommercializationandimplementationofrenewableenergy,specikicallyoffshorewindandwaveresourcesinVirginia.
VirginiaOffshoreWindDevelopmentAuthority(VOWDA• VirginiaGeneralAssemblycreatedVOWDAforthepurposesoffacilitating,coordinatingandsupportingthedevelopmentoftheoffshorewindenergyindustry,OSWenergyprojectsandassociatedsupplychainbusinesses.
Collaboration
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Collaboration
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VirginiaOffshoreWindPortReadinessEvaluation• DepartmentofMines,MineralsandEnergycontractedwithBVGAssociates(BVGA)in2015toevaluate10Virginiaportsfortheirreadinesstoaccommodatesevenoffshorewindmanufacturingandconstructionactivities(blades,generators,nacelles,towers,foundations,cables,constructionstaging).
• BVGAalsoevaluatedkiveVirginiacommercialshipyardsfortheirreadinesstomanufactureoffshoresubstations.
• ThestudyconcludedthatVirginiaiswell-positionedfortheoffshorewindindustrywithsomeneededphysicalimprovements
CollaborativeFisheriesPlanningforVirginia’sOffshoreWindEnergyArea• Throughacollaborativeeffortwithkishermen,wedevelopedaccurate,kine-scalemapsofimportantkishingareasinandaroundtheVirginiaWEA
• Animportantoutcomewasestablishingopencommunicationamongthecommercialkishingcommunityandallrelevantgovernmentalagencies.
Collaboration
Virginia'sOffshoreWindSupplyChainandServiceIndustryOpportunity|July25,2018 24CommonwealthofVirginia--DepartmentofMines,Minerals&Energy
VirginiaOceanGeophysicalSurveyAnalysis:VirginiaOffshoreWindEnergyArea• In2013,FugroundercontracttoDMMEandBOEMconductedaregionalgeophysicalsurveyacrosstheoffshoreVirginiaWindEnergyArea(WEA).
• Thatsurveyandtheresultinggeologicevaluationprovideskey,fundamentalseakloorandsubsurfacedataandgeologicalinterpretationthatwillhelptopromote,planandfurtherthegoalsofsafe,economicandresponsiblefuturecommercialdevelopmentoftheWEA.
IntergovernmentalRenewableEnergyTaskForce• The134-memberTaskForceincludedrepresentativesfromVirginiastateagencies,HamptonRoadslocalgovernments,DepartmentofDefense,Navy,AirForce,Army,CoastGuard,HomelandSecurity,ArmyCorpsofEngineers,VirginiaPortAuthority,NASAWallopsFlightFacility,etc.
• ConcludedthattherenoconklictswiththeVirginiaWEA
AttractingtheSupplyChainandServiceIndustrySupplyChain|Goals|Timeline
CommonwealthofVirginia--DepartmentofMines,Minerals&Energy Virginia'sOffshoreWindSupplyChainandServiceIndustryOpportunity|July25,2018 25
AttractingtheSupplyChainandServiceIndustry
Virginia'sOffshoreWindSupplyChainandServiceIndustryOpportunity|July25,2018 26CommonwealthofVirginia--DepartmentofMines,Minerals&Energy
SupplyChain
TurbinesFounda.onsInter-ArrayCables
ExportCables
OffshoreSubsta.ons
OnshoreElectrical
Installa.onVessels
Opera.on&Maintenance
OffshorewindwillcreateeconomicdevelopmentopportunitiesforVirginia’sportsandcommercialshipyards
AttractingtheSupplyChainandServiceIndustry
Virginia'sOffshoreWindSupplyChainandServiceIndustryOpportunity|July25,2018 27CommonwealthofVirginia--DepartmentofMines,Minerals&Energy
ü Geophysicalsurveysü Geotechnicalsurveysü Fisheriesinspec3ons&studiesü MarineArchaeologyImpact
Assessments
ü CableBurialAssessmentStudies
ü StudieswithinUXO,MetOcean,
ü Vesselinspec3onsü Permits
ü Offshoresafetytrainingü Harbors
ü Site&Landrights
ü Environmentalconsultanciesandtechnicalexperts
ü AdvisorswithinEnvironment,Permits,HSE,Safetyetc.
ü Vesselbuilders/owners
ü Mari3meIns3tutes
ü Archaeologyins3tutesü Onshoreandoffshore
construc3on
ü Engineerswithindesign/construc3on
ü OffshoreLogis3csü Harborfacili3es
INDUSTRIESO&MCONSTRUCTIONDEVELOPMENT
ü HeavystructuresFounda3ons,Exportcables,Substa3on,Arraycables,WindTurbineGenerators
ü Electricalcomponents,SCADA
ü CableProtec3onSystems
ü Consulta3veengineering
ü Installa3onvessels
ü Logis3cservicesforsuppliesandcrew
ü MarineWarrantySurveyors
ü Harbors
ü O&Mfacili3es/buildings(design&construc3on)
ü Furniture,officeequipment/supplies
ü Temporaryworkersandlongtermworkers
ü Service&maintenancewithinmajorcomponents
ü Spareparts
ü Transportofcrew–crewvessels
ü Maintenancevessels
ü Helicopters
ü Harbors
AttractingtheSupplyChainandServiceIndustry
• InMay,theDepartmentofMines,MineralsandEnergy(DMME)issuedaRequestforProposals(RFP)seekingextensiveoffshorewindindustryexpertiseparticularlyasitrelatestoportinfrastructurerequirements,build-outofthevariousoffshorewindsupplychainsectorsandlong-termmaritimeserviceneeds.
• DMMEselectedBVGAssociatesinJulytoadviseontheproject.• TheVirginiaOffshoreWindTeamwillconductanopportunityanalysistoillustrateVirginia’sexistingadvantages,whichwillassistsupplychaincompaniesandotherdecisionmakersintheirduediligenceprocess.
• TheTeamwillalsodekinefactorsimportanttoindustryanddecisionmakersandaddresshowVirginiacandemonstratethatitisthelocationofchoicefortheoffshorewindsupplychain.
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Goals
AttractingtheSupplyChainandServiceIndustry
• ThekinalreportduelateOctober2018will:• ServeasapartnershiptooltoconnectindustryprospectswithVirginia’srobustmaritimeindustrylocatedinHamptonRoads
• ProvideasummaryofVirginia’suniqueadvantages• Communicateoffshorewind-relatedworkforcedevelopmentandbusinessincentiveeffortsunderway
• Identifycompetitivegapsandmakerecommendations• Educatestateandlocaleconomicdevelopmentandenergypolicyleaders
Virginia'sOffshoreWindSupplyChainandServiceIndustryOpportunity|July25,2018 29CommonwealthofVirginia--DepartmentofMines,Minerals&Energy
Timeline
VirginiaOffshoreWindTeamLeadership|BVGAssociates|PartnershipsTeam|WorkforceTeamBusinessIncentives/BusinessClimateTeam
CommonwealthofVirginia--DepartmentofMines,Minerals&Energy Virginia'sOffshoreWindSupplyChainandServiceIndustryOpportunity|July25,2018 30
VirginiaOffshoreWindTeams
• TheDepartmentofMines,MineralsandEnergyleadstheVirginiaOffshoreWindTeam,whichalsoincludesrepresentativesfromtheGovernor’sOfkice,VirginiaEconomicDevelopmentPartnership(VEDP),VirginiaPortAuthority(VPA)andtheVirginiamaritimeindustry.
• ThisTeamregularlyhostssitetourswithgloballyrecognizedoffshorewinddevelopers,procurementandlogisticsexperts,Europeanfoundationfabricatorsandotherpotentialsupplychainbusinesses.
• BVGAssociateswillassistVirginiainitsaggressivepursuitofoffshorewindsupplychainandserviceindustrybusinessinterestsalongtheEastCoast.
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Leadership
VirginiaOffshoreWindTeams
• BVGAssociates(BVGA)isleveragingitsNorthAmericanandglobalpartnerswithextensiveOSWindustryexperience,includingRambollGroupA/S(Ramboll),TimmonsGroup(Timmons),GreentreeConsulting,LLC(Greentree)andtheBusinessNetworkforOffshoreWind(THENETWORK).
• Eachisdeeplyembeddedinadifferent,complementaryareaoftheoffshorewindmarket,bothdomestically(e.g.VA,MA,MD,NJ,NYandRI)andinternationally(e.g.Denmark,France,Germany,NorwayandtheUnitedKingdom).
• BVGApreviouslyadvisedonDMME’s2015VirginiaOffshoreWindPortReadinessEvaluation,inwhichthekirmevaluatedVirginiaportfacilitiesandcommercialshipyardsfortheirreadinesstoaccommodateoffshorewindmanufacturingandconstructionactivities.
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BVGAssociates
VirginiaOffshoreWindTeams
• Offshorewindindustryprospectshavedescribedtheabilitytobuildpartnershipsandutilizelocalassetsasaprimarydriverintheirdecision-makingprocess.
• ThePartnershipsTeamisworkingwiththeVirginiaOffshoreWindTeamtoeducateHamptonRoadsmaritimeassetholdersandindustryprospectsaboutexistingandpotentialsupplychaincandidatebusinesses,assetsandworkforce.
• WehaveengagedtheVirginiaMaritimeAssociation(VMA)andtheVirginiaShipRepairAssociation(VSRA),membersofwhicharecomprisedoflocalassetownersandmanagers.
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PartnershipsTeam
VirginiaOffshoreWindTeams
• WithamaritimelaborforceunmatchedbyanyotherEastCoaststate,workforcerepresentsasignikicantadvantageforVirginia.
• Understandingthatlabormetricsalonedonotalleviaterisk,VirginiaisworkingwithlocallaborandworkforcedevelopmentintereststoaddressworkforceissuesassociatedwiththeOSWindustry.Theseeffortsarestructuredtoprovidepathwaysforindustryprospectsandtoeaseworkforceconcernsthroughthecreationofatalentpipeline.
• TheWorkforceTeamprovidesavitallinktoanexistingnetworkofrecruitingandtrainingresourcesandisbestpositionedtoaddressanddeploystrategiesthatfurtherenhancetheexistingmaritimelaborpool.ThisTeamisalsolookingbeyondthetraditionallabormarkettoayoungergenerationattractedtotheOSWcleanenergymessage.
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WorkforceTeam
VirginiaOffshoreWindTeams
• Virginia’sbusinessclimateadvantagesmakeitanattractiveplacetolocatenewindustry.However,earlyadopterstatesintheNortheastaredrivingtheconversationaroundoffshorewinddevelopmentthroughapprovedincentivesandprojectbids.
• Whilethiscurrentactivityisattractingearly-adopterbusinesstotheNortheast,VirginiaseestheU.SEastCoastdevelopmentasalong-termplay.Witha20-yearschedulefordevelopmentthatspansfromMainetoSouthCarolinaandaprojectedserviceindustrylifetimeofover50years,Virginiaisaprimelocationforthesitingofoffshorewindbusinesses.
• ThoselocatinginVirginiawillhaveacompetitiveedgewhenitmeansthemostastheindustrymaturesanddevelopmentmovesdowntheU.Scoastline.
• DevelopmentofVirginia’sdemonstrationprojectandthefuturebuild-outofVirginia’sWindEnergyAreafurtherstrengthentheCommonwealth'spositionasanaturalhosttomanyofthekeyoffshorewindsupplychainsectors.
Virginia'sOffshoreWindSupplyChainandServiceIndustryOpportunity|July25,2018 35CommonwealthofVirginia--DepartmentofMines,Minerals&Energy
BusinessIncentives/BusinessClimateTeam
VirginiaOffshoreWindTeams
• Virginiaseekstobuildabusinessincentivepackagethatcomplimentsitsbusinessclimateinordertoprovideclarityinavailableincentivesandtocloseincentivegapsneededforlong-termdecision-making.
• Tothatend,theVirginiaOffshoreWindTeamhasengagedwithlocalandregionaleconomicdevelopmentofkicesandwillconsolidateexistingstateandlocalincentivesasaresourceformarketingoffshorewindbusinessinterests.
• TheBusinessIncentives/BusinessClimateTeamisworkingonanobjectiveanalysisdetailingareasinwhichVirginiamayimproveitsattractivenesstotheoffshorewindsupplychainintheformofpolicyandbusinessincentives.
• Theanalysisalsoincludesareviewofincentivesthatstate,regionalandlocaleconomicdevelopmentofkicesofferandrecommendationstoimproveincentivesforpotentialsupplychaincompanies.
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BusinessIncentives/BusinessClimateTeam
GetInvolved
CommonwealthofVirginia--DepartmentofMines,Minerals&Energy Virginia'sOffshoreWindSupplyChainandServiceIndustryOpportunity|July25,2018 37
GetInvolvedVisitwww.vaoffshorewind.orgtolearnmoreandgetinvolved
Virginia'sOffshoreWindSupplyChainandServiceIndustryOpportunity|July25,2018 38CommonwealthofVirginia--DepartmentofMines,Minerals&Energy
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