After nearly two years of work, the companies had been planning to install a test turbine off the mid-Atlantic coast near Cape Charles, Va. Now -- and despite having recently received approval for the installation from the Virginia Marine Resources Commission (VMRC) -- the next phase of the turbine's development has been postponed.
Gamesa and Newport News Shipbuilding, a division of Huntington Ingalls Industries, have been working on the turbine since September 2010, focusing on turbine reliability, low maintenance and servicing requirements, civil engineering efficiencies in infrastructure development, and cost of energy.
In a written statement, the two companies said when they began their work, the future of offshore wind in the US looked promising and a viable and healthy commercial market for wind power seemed just a few short years away.
However, they said, an analysis of current conditions indicates that a viable commercial market in the United States is still at least three or four years away.
But that wasn't the only reason the companies opted for a pause in their activities.
Other factors they cited for the decision include regulatory issues on the federal level that still affect the level and speed at which projects can be approved, the continuing lack of an offshore grid, and uncertainty surrounding the federal Production Tax Credit, which currently slated to expire at the end of the year.
Without a mature offshore wind market in the United States, it is extremely difficult to justify the enormous expenditure of capital and utilization of engineering and technical resources that would be needed to build and install a prototype in the US, the companies said.
Despite the suspension of their activities, Gamesa North America Chairman David Flitterman commended Virginia Gov. Bob McDonnell and his administration for the time and effort they put into approving the permit for this project.
“The Governor is a leader for his vision to utilize clean, renewable energy, and his team did everything in their power to fast track this offshore wind development," Flitterman said. "Gov. McDonnell understands the value of offshore wind -- a vast, untapped domestic energy resource that can power local economies and put people to work. I think we both share the same hope that the U.S. market can mature quickly so this project and others like it become a reality in the near future.”
“The decision is disappointing. However, our commitment to our country’s energy efforts continues,” said Doug Stitzel, Newport News Shipbuilding vice president of energy programs. “Huntington Ingalls Industries’ ability to design, fabricate and deliver complex, marinized, safety-related components will be required to satisfy the growing needs for energy. We look forward to future opportunities for collaboration with Gamesa and other alternative energy leaders."
The joint Offshore Wind Technology Center, opened by the companies in February 2011 in Chesapeake, Va., will wind down at the end of the year as the CDR is completed.
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