US residents in the Midwest benefit financially from onshore wind farms – so will coastal residents see additional income from offshore development? The insurance risks and Virginia’s plan to protect taxpayers are just two of “many firsts” for the Coastal Virginia Offshore Wind Project. Dominion Energy is being asked for performance guarantees. How will that play out?
How much money can you make with a wind energy patent? That depends on who funds it. In case you didn’t read the whole Department of Energy analysis of Wind Energy Technology patents, we did – and the US might be looking for better payback on patent funding in the future. Speaking of innovation, The University of Plymouth and the ORE Catapult have established a research accelerator focused on offshore technology.
Visit Pardalote Consulting at https://www.pardaloteconsulting.com
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Sign up now for Uptime Tech News, our weekly email update on all things wind technology. This episode is sponsored by Weather Guard Lightning Tech. Learn more about Weather Guard’s StrikeTape Wind Turbine LPS retrofit. Follow the show on Facebook, YouTube, Twitter, Linkedin and visit Weather Guard on the web. And subscribe to Rosemary Barnes’ YouTube channel here. Have a question we can answer on the show? Email us!
Uptime 127
Allen Hall: Everybody welcome to the uptime wind energy podcast. very packed show. First off, wind. Farms help increase the income and GDP of local communities, particularly in the Midwest. And it’s not small, it’s over 5%. That’s a big increase. And the department of energy issued a report recently that looked at the number of patents that are derived from DOE funded
Allen Hall: efforts.
Joel Saxum: So sticking with that, we’re gonna go and visit our friends in the UK and see how the ORE catapult is working with the University of Plymouth to drive some innovation on that side of the. Then after that, staying in the water again, gonna jump down to Virginia and talk about how dominion energy’s big project out there for 10 billion, has got some, some funny, fine print in the terms and conditions tune the.
Allen Hall: So guys, a recent survey went out and study, went out that, looked at incomes and economies where wind turbines are installed in the United States. And obviously United States, most of the wind turbines are installed in the Midwest from Texas to Minnesota. And a lot of those locations are rural and the feeling was on the street that, it putting wind tur is near or on your property has lowered the overall value of the property because of the wind tur is being there.
Allen Hall: But that turns out not to be true. In fact, as based on the survey and study, it said that us counties where wind energy was built, so increases in per capita income of 5%, which is a lot per capita and gross domestic product per capita go up by six and a half percent. So when they compared adjacent counties, they saw where the wind turbines were, had basically better income and more economic. the, the second part of this is that the ho housing prices were pretty stable. Didn’t seem to make much difference, in terms of whether wind tur were there or not, didn’t change home prices much. what they did see also was a shift in the workforce. So the workforce, which was primarily rural, Farmers, some part of them, those people started to be more mechanically inclined and technicians farmers are mechanically inclined anyway, typically, but there were more people working in the wind locally, so they could work the farm and also work at a wind Turman site.
Allen Hall: That seems to be the, the shift. so that relates to offshore wind and the big push in the United States for offshore wind. where offshore wind is not gonna be paying local, the local people, anything really? because they’re in federal waters, they don’t have to pay landowner for anything they’re paying the federal government. so are we just gonna see as much acceptance? On the offshore wind side as we have on onshore wind seems like onshore wind are people who are around onshore wind that are getting the, the monthly payments of a thousand $2,000 a month or more are really happy with that income. That’s a, that’s a nice little bonus in your mailbox every month. Offshore’s not gonna do that. Are we gonna have trouble with offshore because we don’t have payments to the people along the shore.
Rosemary Barnes: Don’t you think that they will get, payments from where the transmission connects in at least maybe not property owners individually, but the council should the towns, if they’re not, then I would, yeah, I think so suggest they need to re rethink the agreement.
Rosemary Barnes: Yeah. Yeah. And would a lot of the benefits, is it actually from it, it sounds like the house prices aren’t property prices. Aren’t going up so much, although I guess that yeah, if you’ve got selling a farm that has. Few thousand a month income, that’s gonna be worth something to the, the sale price. Sure.
Rosemary Barnes: It is. But sounds like a lot of the benefit is likely due to the good jobs that came to the, the region. so. That will still be needed with an offshore wind farm as well. I mean, people aren’t, they’re not hiring dolphins to to maintain these things or something they’ll still have, you know, people who live, people will still live onshore to, to maintain them.
Rosemary Barnes: Won’t
Allen Hall: they, I, I think that they will. Joel. I mean, you’re on the east coast right now. You’re gonna see some
Joel Saxum: of this. Yeah. In Newfoundland it’s windier than, than all get out every day here, they should have wind turbines all over this place. but I could say something from the, so from a little bit of my past, in the oil and gas world, and then also some knowledge from the mid middle part of the United States.
Joel Saxum: So there’s, there’s something that was put into a lot of, this is, this is oil and gas. Now we can, I’m gonna take a snapshot of say like the shale boom in North Dakota. When there was a lot of people that got $5 an acre for their land, to, for lease rights for oil companies, cuz they knew some stuff was there back in the seven seventies, eighties, nineties Shabo happens in 2005 and now they’re getting 10 grand an acre, right?
Joel Saxum: So now you have neighbors that hate each other or that hate the companies that are there because Hey, this guy’s got five bucks an acre. I got five bucks an acre. You know, I paid for my kids Christmas in 1980. Now this guy’s got 8 million bucks and he is retired to Florida. This isn’t fair, that kind of thing.
Joel Saxum: So that, that sparks a lot of, some of the, not in my backyard, these fights that you have in the, in the middle part of the country. So, and wind the same thing. If you drive through Iowa, it, sometimes you see one farm and you can see it by the roads and where the barns are. Like that’s a, a, a agricultural institution of one company or one, you know, farmer.
Joel Saxum: He has a wind. The next farmer. Doesn’t the next farmer doesn’t get anything. He just has to look at the wind turbines and that guy’s getting a ton. so it does breed a little bit of contempt in those, in those little towns. Right? So, going offshore, you’re gonna have some people that may have built some houses along the shoreline that are a little bit mad about having to stare at some winter turbines or some not necessarily the winter.
Joel Saxum: Sometimes it’s just the blinking red lights at night, like that drive people nuts, you know? True, but I guess that’s just a, a snapshot and a little bit of a window of some, some thoughts around it.
Allen Hall: Well, in, in oil and gas and forever, I used to work with people when we worked in Kansas that were getting oil rights or get a check in their mailbox every month for the oil rights to the property today at they own.
Allen Hall: And that was that’s continued on for years. And similars sites have been pumping oil for 50, 60 years. That makes complete sense to me. And I wonder if that model is. Part of the answer to answer on the offshore question, a little bit of revenue to the local towns and communities bumping up the schools, bumping up the fire departments, making the roads better as part of the installation that they can see out there.
Allen Hall: Backdoor. Helps everybody to swallow it. I, I feel like that’s where it’s going to go. I hope so. Because right now the federal government’s making out like bandits, right? Yeah. Well, and that’s so, so, and the local participants, here’s
Joel Saxum: another example for you in Texas. all oil activities taxed by the local school districts get a lot of money.
Joel Saxum: So there’s a, there’s the school dis the school districts have their own funds, but then there’s also a general fund. So you have independent school, independent school, independent school. Once their budgets are full and they reach X percent of surplus, then the rest of that money goes in the general fund.
Joel Saxum: So even if you’re in an area in Texas where you don’t have oil and gas, you benefit from the Permian basin in your school system. And that’s why they can build a hundred million dollar football stadiums for high school.
Allen Hall: That’s right. They’re amazing. Rosemary, the football stadiums out in the premier basin are amazing.
Allen Hall: Yeah. So, yeah, it’s
Joel Saxum: unreal. So just where, where these, how the contracts are signed and what the states and counties municipalities do at the time, you know, as well as the federal government, for the revenue sharing. it’s very important. I think some, some people could take, take, a little bit of a look at the state of Alaska and their permanent fund dividend.
Joel Saxum: When they found all that oil up there, they establish a fund where if you’re a resident, you get X amount on your taxes every year, depending on how the fund’s doing that year. you know, that money could either be flooded back into the system, like you said, in Alan for infrastructure or who knows.
Joel Saxum: There’s a lot of, a lot of capabilities or possib possibilities. Yeah.
Allen Hall: I, I do think we’re starting to see a lot of resistance along the shorelines on the east coast. And I think this is one way to sort of answer that. It has helped in other places, it seems like a possible answer here and sort of moving on a little bit to another financially impacted area is the area of research and, what the department of energy has been working on in the United States for.
Allen Hall: 40 plus years, there was a report put out last year in 2021 that talks about DOE funded, wind energy patents, and how many they, of the DOE funded projects have resulted in a patent from 1976 to 2018. There was 236 patents. So that’s a little over 40 years and 236 patents. Isn’t a lot it’s actually represents about less than 1% of the total number, number of wind energy patents filed in that same time period, where if you look at what the industry has done in that same time period, GE and, and just win patents, forget about all the other GE patents and just win patents.
Allen Hall: GE, was awarded almost 2200 patents. Ive was awarded about 1700, Siemens also about 1700. So they, you know, 10 times what the DOE was able to generate in terms of patents. Now, the DOE is making an argument that well, the GE patents are based on, on our patents. So they’re building on the work that we did, that, that that’s, that’s probably true on some level, but if you think about the amount of money.
Allen Hall: The DOE has spent is that money being spent in, in areas that are generating new technology, new advancements, it doesn’t look like it. And, and if the recent signing of the inflation reduction act is trying to promote us manufacturing of wind tur and wind energy and solar, same thing. Do we have even a framework?
Allen Hall: To create new technology and new manufacturing techniques in the United States. I don’t think so.
Rosemary Barnes: Yeah. I, I, I think it’s interesting and I, I’ve been using the well DOA staff, N R Sandia, if that’s how you say it, a lot of government funded research. in wind energy, that was pretty much all that I had when I was doing my PhD research.
Rosemary Barnes: I, I couldn’t, I, I attempted to get some, you know, industry collaboration to get some of their real data and was unsuccessful. So I had, it’s not real data in the sense that it’s not, you know, real wind turbines that have. Been operating commercially for, for the most part, but there is data made by people with real expertise in the, the industry.
Rosemary Barnes: And, you know, you can get a wind turbine design to use as a baseline for your new design. or you can get, you know, some good operational, data or, you know, even wind speed data. They’ve got a bunch of design tools so that you can, you know, focus on the, you don’t need to design from scratch an entire wind turbine, blade, geometry and structure, and you know, materials, distribution.
Rosemary Barnes: You can just focus on the one part that you, you wanna work on. So I definitely have a time I’m like, well, this is amazing that this is all, all provided for free, totally open to anyone in any country. I mean, I was researching in Australia, obviously. so they’re doing something very valuable and are they limiting the benefit of that to Americans?
Rosemary Barnes: I, I didn’t see that they were, and I was so pleased as an Australian, you know, we don’t have a lot of wind turbine research here, so, I would’ve been quite stuck without it. yeah. Or I would’ve, I would’ve still done my project, but it would’ve had minimal relationship to the real world, you know? so yeah, I can see, I can see a point.
Rosemary Barnes: Is that good? good use of us taxpayers dollars to produce all that for the benefit of the world. I mean, certainly, I think it’s nice. thank you. Well, if you look it, but I didn’t pay for it.
Allen Hall: yeah. Yeah. And if you look at some work that the EU has done in recent times, they’ll publish the, the, the areas of research that they’re involved in.
Allen Hall: And one of them is wind obviously. And if you try to go find the research, you can’t get access. Or anything that the us government essentially puts out, you can get fingers on somehow you can either get it from a local library or you can get it. Cause it’s posted online, makes it really easy. and so there’s just a huge difference in the way that Europe and other countries deal with creating new technology and the way the United States does it.
Allen Hall: But you, you kind of get the feeling like, well, these there’s that the us is funding other countries to develop wind. That’s what it feels like. And I think the data somewhat supports that. I’m not sure that’s a, a great concept because we’re in, in a slightly different world and we haven’t really adapted to it.
Allen Hall: And I’ll give you the counterpoint to this or E catapult, which is a UK or, funded organization is working with the university of Plymouth. Oh, okay. You see these or catapult, fresh leases on a fairly regular basis. And they have a new, offshore development. It’s called the collaborative offshore, renewable energy sub systems cost Coss research accelerator.
Allen Hall: So what the, ORE catapult is doing is working with the University of Plymouth who has all these great labs, offshore, tanks, sea tanks, and all the infrastructure to, to do testing ORE catapult. The university are working together without out without government funding to connect them with industry.
Allen Hall: Groups to help fund research that is directly then applicable to the, the indu, the industry. So unlike the United States, it doesn’t seem always isn’t a, a company or industry partner there. it seems like in the GE case the department of energy GE sort of piggybacks and some DOE stuff, and then it gets publicized to the world.
Allen Hall: The way that the UK’s doing is a different model. They’re saying, Hey, we don’t need federal funding or government funding for it so much as we just need to connect the dots here, because there’s plenty of money being poured into renewables. We just need to help our local economy and businesses grow.
Allen Hall: And here’s how we can do it. We can actually connect them with a bunch of grad students that are really smart and universities that have research facilities and get things done, less expensively. We could do it ourselves internally. And doesn’t, it seem like a, just a totally different model than what the United States has built
Joel Saxum: in the us.
Joel Saxum: You have a bit of both models, right? Because you don’t have as, so, so you have, and of course there’s a difference as well between, state funded institutions and private institutions. And that’s, there’s a diff big, big money change there. Right? So you have some of both, but I think the ones that you, you know, that come to the top of your head, A lot of that research is this is, is kind of like this, like I’ve seen a lot of programs coming out of like, okay.
Joel Saxum: So I’ve spent a lot of time in Houston rice, the rice university, big, innovation and technological fund there. That’s all funded by, Oil and gas companies and industry it’s it’s, it’s more like this, the, or E catapult diversion here instead of, relying on government funds. I think that the us has a special case in a lot of the government funded laboratories that we have.
Joel Saxum: Like, we talk about Sandy Los Alamos. NRE, there’s a, there’s a lot of those, those programs out there. Yes. and, and that’s all RPE E we just talked about RPE E there’s a lot of those, those funds out there. And I think there’s a, you know, there’s a danger of if you’re working on something that you’re trying to keep close to your, to your chest, that, that it gets out when you work with those guys.
Joel Saxum: I think there’s, there’s a lot of opportunity. Oh yeah.
Allen Hall: I agree. But who’s who are the, who? The universities that are working in offshore win offshore wind at the moment? None that I can’t name them. I know the ones that we saw that Rosemary and I saw down in, in San
Joel Saxum: Antonio. Yeah. So I can I continuously talk about this as well, because of course the company I work for wind power lab is a Danish company and we work with DTU all the time.
Joel Saxum: Right. We work. We, so there’s a lot of industry involvement on that side of the pond. Yes. And over here, I know. Georgia tech has a, one of the mechanical engineering labs is doing some stuff with re for, repurposing blades, making a circular economy out of blades, which is a great, great idea or, you know, industries tackling it, great problem to tackle. but that’s really the only one I know there’s not a whole lot of, yeah, right? Yeah. It’s, it’s in, it’s in that government funded laboratories rather than in the universities. There isn’t even a, really a univers. Program that I know of that is a wind energy program in the us
Allen Hall: at a high level. There, there must be.
Allen Hall: Yeah, I’m sure that there are, but it isn’t like it slips to the tip of your tongue all the time. And I think that there’s just so many different models that have been going have been happening for the last 50 ish years. I’m not sure the us has the best model and I’m not sure we’re looking for the best model at the moment.
Allen Hall: And if we’re gonna be putting. 300, 400 billion into something we ought to be looking to see if we can change the system to be more efficient at it. I that’s, that’s what I see. I just don’t see the growth that we probably should have in terms of engineering, growing engineers, growing technology, becoming that.
Allen Hall: Root base of technology growth that we, that the United States has been in university systems for all kinds of other things in, in wind and solar, really nothing. And you can actually see it in the patent numbers. The same thing the patent numbers have dropped off considerably in the United States in wind industry.
Allen Hall: In the last 10 years, it’s just fallen off a cliff. Either the it Rosemary, I think Rosemary’s point as well. The industry’s developed and I think, well, that, that’s probably true, but it really hasn’t developed in offshore very much at all. I’m sure. I, I agree with you. Those we’re just pumping out wind Turbin, but offshore there’s so much to know and we haven’t.
Allen Hall: Necessarily been proactive. We’re gonna, we’re gonna go to DTU. Yeah. Yeah. and we’re gonna pick pocket them, right. Or we’re gonna go to, or catapult and we’re gonna pick pocket them because United States hasn’t been proactive in that area culture. It just seems like
Joel Saxum: a very long, you can see culturally though in the us, I mean, as far as, so, so take a, take a step back and, and Alan, you and I maybe put our American flag patches in our back pocket for a second.
Joel Saxum: And, and we just talk for a second. We aren’t the first people to develop renewable and clean tech. You know what I mean? Like, so, so we’re a lot of oil and gas, coal. Like that’s been our thing that, that has driven the American economy for so long, the industrial revolution, all this, you know, pump pumping out vehicles.
Joel Saxum: We’re, you know, the, the Ford model Ts and stuff like the, the, the history of innovation in the us is, is, also on the, be on the inverse of it. It it’s it’s. Kind of right at certain form. So we’re not sitting, looking at the clean, clean energy space, renewable space, and you can take that and look at like who manufactures, solar panels, where are all the OEMs for wind?
Joel Saxum: None of them just here. Right. The, yeah. China, well, China. Yeah. Right. But I mean the big, the big OEMs for all wind stuff, are they exist in Europe where they thought they thought a little bit before we did about climate change and wanted to do renewable energies and things of that sort. So culturally sure. on the clean energy spectrum of tech, we’re just kind of like, we’re starting to hit our stride and we’re, we’re, you know, a lot of innovators and innovation hubs and, and money being flown in, from government, from private industry, from all these different. but we’re, we’re, that’s not what we’re first in, I guess, or, or not our focus.
Allen Hall: No, but I, I look at it. Can I use an analogy? Rosemary, are you gonna punish me for using analogy cuz you should punish me for using an analogy that? I look at, like, making, Silicon ships, right? that, that was really started in the United States for the most part. And then. Right now there’s nobody making those things and that then they had a recent bill in Congress to try to bring that back.
Allen Hall: So it was sort of nurtured because we have a huge marketplace for it that we can afford to do. and then all that industry just poof goes offshore and we think, we don’t think anything of it. I think wind has done that. Solar has already done that. Solar has totally done that more than even wind it’s exploded offshore.
Allen Hall: And we sit here, writing software in the United States. That’s we make Facebook, we don’t make wind turbines. Yeah. And I think that’s where we’re gonna have trouble. And Rosemary sees it the opposite way in Australia. Australians are, are digging in the ground. They’re doing the hard stuff right now. We don’t do that in the United States.
Allen Hall: So you, you, you realize like at what point does the United States figure out, like we gotta build stuff mm-hmm and we need to focus on building the things and building the industries and are, are we gonna do it? And do we have a structure to support it? I don’t, I don’t know, could be wrong. We may have a great system.
Allen Hall: It just doesn’t seem like it. Wanna buy a Siemens SCSA wind turbine. It ain’t coming from the us. You.
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Allen Hall: Sign up for the uptime tech newsletter at weather guard, wind.com/news. So big news with dominion energy, Dyna, Virginia, as you everybody knows, they have a couple of wind turbines think there’s five or six wind turbines.
Allen Hall: No, no. Those two wind turbines out in the water, off the coast of Virginia and that, but they’re gonna be putting a whole bunch more, because of demeaning energies. plans to put 2.6 gigawatts about 10 billion in 176 wind turbines off the coast of Virginia Beach, a very lovely area. So the, they were granted approval to go do this work, which is one of those major milestones into moving the project forward dominion plans to, complete construction in 2026 so that they got a short timeframe.
Allen Hall: When they’re discussing this with the state and coming up with the final ingredients to an agreement. there were described, there were several concerns raised throughout the proceeding regarding the affordability of the project and the financial risks to taxpayers or rate payers in case of the same people, that, that the state of Virginia was concerned that if dominion energies, project went south, that they had more cost in it expected.
Allen Hall: They didn’t want the rate payers of Virginia to pay for that. So that’s where they got into a sort of a. More, longer term talks. So here’s what ended up happening. the state sort of forced on consumer protections, and it included a requirement that dominion notify the state within 30 calendar days.
Allen Hall: If it finds that the total project costs are expected to exceed the current estimate. Now, if that Joel does every project not go over budget. And offshore in the ocean. Come on, right. This one’s going on. You might as well start
Joel Saxum: filing that paperwork now. Yeah. Weather delays. You’ve got a whole bunch of, able semen out there that have never installed the wind turbine Jones act.
Joel Saxum: People that have never been on a vessel. It’s yeah, it’s gonna, it’s not gonna go well,
Allen Hall: right. Right. So, you know, there’s gonna be delays. And then it says if, or if they have to notify it to the state, if they, if the final turbine installation is expected to be delayed beyond February 4th, 20, 27. Now, I don’t know.
Allen Hall: What’s magical about February 4th. That’s super bowl, odd date, but okay. February 4th, 20, 27, and must be super Sunday. there’s a lot of big screen TVs. You gotta power up for that big weekend, right? I mean, that’s, that must be what it is.
Allen Hall: So Rosemary, it also said that one of the conditions was, is that beginning with commercial operations and extending for the life of the project, customers shall be held harmless for any shortfall in energy production below an annual net capacity factor of 42% as measured on a three year rolling average.
Allen Hall: Now that sounds tight to me because I, I looked up the net capacity factors of other wind farms and it’s about 40 to 41. So 42 onshore
Rosemary Barnes: onshore. This is offshore wind
Allen Hall: farms. I, I know that’s offshore. Yes. I, I agree with you. But 42% seems like a lot to me. But also with the fact that in the UK, they’ve been seeing slowing wind speeds and that the, the amount of power produced on their offshore projects has dropped by like 10%, some something magical like that, a huge amount engineering wise, 10 percent’s a lot that that would make this project start creating red flags.
Allen Hall: Like Dominion’s gonna start paying for the lack of production. Does four doesn’t 42%
Rosemary Barnes: seem higher for offshore. I mean, 42%. Isn’t high for offshore for a new new project. I mean, for it to stack up economically you need a, a higher capacity factor on offshore right than the same project, offshore, because the cost of installing an offshore in farm is way higher than in sho one.
Rosemary Barnes: So. The figure doesn’t jump out at me. And I know that there’s plenty of offshore wind farms that are pushing out past 50% capacity factor expected. I don’t know what their expectation is here. But, it is interesting that if you had three years in a row of low wind speeds, that the company would be liable for that. so yeah, it, it’s interesting. And it’s funny. it’s a topic I’ve been talking about a little bit recently and social, social media. Comments is I, I’m not sure why a capacity factor people are so obsessed by a capacity factor because you can make it whatever you want. So, you know, if I was this company and, capacity factor, it just had to be met.
Rosemary Barnes: You put in some small, small generators with big, long blades and you’ll bump up your capacity factor, you know, you’ll get less annual energy production, because of it. But your capacity factor will be good. You can, to a certain extent, choose whatever capacity. That you want, you could get close to a hundred percent.
Rosemary Barnes: If you had a small enough generator, it would just be a stupid project, cuz it wouldn’t make much, it wouldn’t generate much electricity. Well, that’s what I wanted. I don’t, that’s what I wanted. The hero.
Allen Hall: Roseberg that’s that’s what I wanted to hear because I figured you knew what the angles were there because as a industry expert, you’ve been around it a long time.
Allen Hall: Is, are there ways to get around this? to, for, to, to tech, dominions investment, are there ways that they can help themselves? Like would they, would, would that be something that they do? Are there ways yes. Put in to game the system, put in a,
Rosemary Barnes: put in a low wind speed turbine and high wind speed area and you’ll get less.
Rosemary Barnes: Energy production, but, or you’ll pay more for the turbines cuz you’ve got longer blades, but your generator’s gonna be, you know, like really cranking out close to close to maximum the whole time. So you’ll get a, you get a great capacity factor, but I’ve, I’ve never seen a performance guarantee written in this way and I’m not an expert, but I did work quite a bit with, performance guarantees when I was working on, deicing, the, you know, blade heating systems. for LM wind power, because that’s something that people are pretty, pretty concerned about in that area. And it was always a calculation based on actual wind speeds. You know, you were never requiring the OEM to guarantee that the wind would be , you know, a certain. Certain level. So, you know, you’d, you’d give a power curve and then you’d say, you know, we guarantee uptime of 98% or, or whatever it was.
Rosemary Barnes: And then you do the calculation for, for what it was. It wouldn’t be the capacity factor because it’s not just your, your uptime and meeting the power curve that you promised. You also need good wind to get a good capacity factor or average wind to get the average capacity factor. So it’s, it’s a strange way to ride it.
Rosemary Barnes: And. I would not recommend someone signing something like this, unless they had a, a huge buffer and, you know, somewhere to somewhere to hedge.
Joel Saxum: Well, I was the question I I’ve got the head. I’ve got the hedge in my, in my hand right here. but the, the, the question I have is dominion. What is their track record in developing wind onshore offshore?
Joel Saxum: Do they have. So maybe they, maybe they stepped in some mud here that they didn’t know they were stepping in because that’s one of the articles I read about this. So I, I came across this one and I called a couple of my friends within the wind or the renewable energy insurance side of things. And specifically, two guys that deal in downtime insurance.
Joel Saxum: And when I told them about this contract, they said, thank you so much, call you back in a. Because they were going right to their teams going call dominion. We want this risk because, because the hedge is by reinsurance on it. If you’re dominion, you have to, you have to. So right. But
Rosemary Barnes: it’s weather insurance really.
Rosemary Barnes: That’s what all insurance and wind is. It’s insurance against, persistent low wind speed. So it’s
Allen Hall: Rosemary, what are the single point failures in an offshore wind? The ones that can really bite you.
Rosemary Barnes: Yeah. Well, I mean the, the wind pumping there is the one that’s front of mine for, for this particular one.
Rosemary Barnes: And then some sort of, you know, serial design defect that took down a, a fleet rather than just, you know, one turbine. And I guess, you can also have some, yeah. Some offtake problems as, as well. Yeah. Something that
Allen Hall: substation go bad substation, get hit by a boat, tip over, hit the water. Boom. You’re down for six months.
Allen Hall: Yeah. It sounds like there’s a lot of single point failures in this that just hard to address enough. I was insuring it. I would really want to make sure that I had my bases covered because on onshore it’s not as sort of single point failure mode coupled to the way that offshore wind will be. Am I, am I missing something here?
Rosemary Barnes: Well, they’ve still got one connection point to the, to the grid. And you do see it’s. I mean, there’s been examples in, in Australia where, you know, some, operating, operating system or there was like a safety trip that, that. Tripped, during an event, right. That it should have been able to ride through.
Rosemary Barnes: It was huge, huge, fine, and terrible for the industry as a whole, cuz you know, the whole of renewable energy in Australia got blamed for, you know, this one, this one blackout, yep. That was, you know, caused by a bunch of other failures, but the wind farm shouldn’t have failed. It, it should have been able to keep on operating, supplying, but it, it tripped because of you know, some fault condition.
Rosemary Barnes: So I, I think that. You do see them from, from time to time in, in onshore as well. but yeah, the capacity factor guarantee is a weird one because it depends on the
Joel Saxum: weather. We were just in a meeting today with a, insurance group out of Switzerland talking about natural catastrophe monitoring. So if you go natural catastrophe monitoring, that was the opposite of what we’re talking about here for downtime.
Joel Saxum: But their, their worry was we have all this risk out. Were do the, do the models for insurance companies cover this or are they out to lunch? Because there’s not a good, there’s not a good model. There a, a hurricane comes sweep. There’s there’s been nothing Toure off the coast of Virginia ever. Right. So there’s not a model that’s built right.
Joel Saxum: In for the insurance industry to say, this is every 10. You know, at 10,000 years we have two hurricanes that would wipe out all these that doesn’t exist. So there’s gonna, I foresee, at some point in time, whenever we get wind offshore in the us, whether it’s in the Gulf or up the east coast, there’s gonna be a hurricane that takes out half of a wind farm.
Joel Saxum: It’s gonna, I believe it will happen.
Allen Hall: Has to happen. It happens in Texas with tornadoes
Joel Saxum: all the time. Yeah. Next 10 to 20 years, it’s going to happen. So now, if you have insurance company, that’s ensuring that the physical asset, and then you have insurance company, that’s ensuring the downtime who’s at fault.
Joel Saxum: I’ve I would foresee that the name dominion will be in court cases until this thing is decommissioned.
Allen Hall: Yeah. It’s a shame. It’s a shame because I, I think that putting that one provision in is really gonna handcuff dominion, and I’m not sure that’s what you want to. They’re trying to protect their rate payers and I get it, but I’m not sure that’s the right way to go about it.
Allen Hall: We’re gonna find out. Maybe it is. Maybe it was great. Maybe it’s great for those for the Commonwealth of Virginia, but on dominion side, dominion can walk away from a project. It’s one of the things they can do still is walk away and that would be the worst thing to have, have happen. So. More to come. We just have to keep our, keep our eyes on it and, and watch how it develops, cuz it there’s a, there’s a lot more to happen in the next couple years as dominion makes this project.
Allen Hall: That’s gonna do it for this week’s uptime wind energy podcast. Thanks for listening, please take a moment and give us a five star rating on your podcast platform. Be sure to subscribe in the show notes below to uptime tech news, our weekly newsletter, as well as Rosemary’s YouTube channel engineering with Rosen.
Allen Hall: We’ll see you next week on the Uptime Wind Energy podcast.
