Posted on November 15, 2023
A Spanish wind turbine manufacturer vacated its lease and pulled out of a planned $200 million project at Portsmouth Marine Terminal.
“Siemens Gamesa discontinued plans to build and operate an offshore blade facility in Virginia, as development milestones to establish the facility could not be met,” a company spokesperson said in an emailed statement.
The planned turbine blade finishing facility, announced by then-Gov. Ralph Northam in 2021, was expected to create 310 jobs.
Siemens Gamesa told the Port of Virginia about a month ago the company is canceling the project, Virginia Port Authority spokesperson Joe Harris said. Leaders considered a number of potential uses before the project fell apart, Harris said. Among them: finishing turbine blades for offshore wind farms, including for Dominion Energy’s wind farm off the Virginia Beach coast.
Siemens Gamesa said it would continue to meet its obligations for the Dominion wind farm. A spokesperson for Dominion Energy said the canceled production facility was not scheduled to manufacture blades for the Dominion wind farm due to the project timing. Those blades will be manufactured in Europe, the spokesperson said.
“Coastal Virginia Offshore Wind remains on time and on budget,” the Dominion spokesperson said.
When the manufacturing project was announced with fanfare in 2021, developers told The Virginian-Pilot the facility would have the capacity to finish blades for 100 turbines a year. But, Harris said, the eventual fate of the project was a “moving target” as developers tried to figure out the best use of the terminal site. In the end, Siemens decided to walk away.
Portsmouth Mayor Shannon Glover said business factors outside of the city’s control unfortunately drove Siemens’ economic decisions. Still, he said the city would continue to seek out partners “that will provide services and good-paying jobs for citizens and tax revenue for our city.”
The U.S. offshore wind industry, especially in the Northeast, is experiencing setbacks due to high inflation, rising costs and supply chain issues. Danish wind energy developer Ørsted canceled two New Jersey projects earlier this month as three other New England projects were scrapped recently, according to the Associated Press.
Siemens Gamesa parent company, Siemens Energy, has struggled this year amid failing wind turbine parts and issues ramping up offshore wind production, according to Reuters. The company scrapped its 2023 profit outlook in June following the discovery of faulty wind turbine components in January.
Changes in the scope of emerging projects bring changes in supplier demand, said Doug Smith, president and CEO of the Hampton Roads Alliance. Still, he noted recent successes in offshore development, like federal approval of the Dominion offshore wind farm and a recent $39 million grant to turn the former Lamberts Point Docks into an offshore wind logistics and manufacturing hub.
Matt Smith, the alliance’s director of energy and emerging technology, was also optimistic, saying the region would still be attractive to other major offshore wind suppliers. Beyond manufacturing, the region’s deep water port facilities could also help serve as logistics hubs for the industry, he said.
Siemens Gamesa’s decision also means the Port of Virginia won’t have to relocate an existing container yard, Harris said.