Port of Va. to lease land to Danish wind company for East Coast hub

A boat passes in front of the Port of Virginia. (Ned Oliver/Virginia Mercury)

With an eye to becoming the East Coast hub for the fledgling U.S. offshore wind industry, Virginia on Tuesday morning signed a deal with Danish wind energy giant Ørsted to lease land at the Portsmouth Marine Terminal for a staging and equipment site.

“We have the potential to drive offshore wind for Virginia, but also for the entire East Coast,” Gov. Ralph Northam said at the announcement of the agreement in Norfolk. “We are so well positioned here in Hampton Roads for our port.”

The praise was echoed by Thomas Brostrøm, president of Ørsted’s North American division, who cited the region’s “world-class port,” “maritime heritage” and workforce.

“We hope today’s announcement will demonstrate the potential we see in Virginia, which is large,” he said.

Under the terms of the deal released by the governor’s office, Ørsted will lease 1.7 acres at the Portsmouth Marine Terminal through 2026, with the option of expanding that footprint to 40 acres. According to a news release, “if fully executed,” the agreement could produce almost $13 million in lease payments and more than $20 million in site upgrades. In Norfolk, Northam said offshore wind could add some 14,000 new jobs in Hampton Roads.

Port of Virginia spokesman Joe Harris said Tuesday that the final agreement signed by Ørsted and the Virginia Port Authority Board of Commissioners won’t be available until later in the week.

Broadly, the deal gives the Danish company, the biggest offshore wind player in the United States, a foothold in the emerging market. The U.S. has been slow to adopt offshore wind, with one barrier being its lack of supporting industries to manufacture, construct and maintain turbine parts. 

Over the past year, however, a flurry of projects up and down the Atlantic coast have been revealed — many of them including Ørsted. The company has been involved in Virginia since 2017, when it began working with Dominion Energy on its Coastal Virginia Offshore Wind pilot project.

This fall, however, when Dominion announced it would build a 2,600-megawatt wind farm capable of powering 650,000 homes off the state’s coast, the utility indicated it had no plans to include Ørsted in its larger project.

The news release from Northam’s office stated that Ørsted could use its Portsmouth Marine Terminal site for work on the CVOW project, as well as for other projects along the East Coast.

In Norfolk Tuesday, Virginia Port Authority CEO and executive director John Reinhart called the deal “a real engine for jobs in all of Virginia” and “the foundation block for a whole new industry.”

“It’s just the beginning,” he said, “and we have more capacity to do more.”