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Bill for Dominion Energy offshore wind farm increases from $9.8bn to $10.7bn The cost of the 176-turbine Coastal Virginia Offshore Wind (CVOW) project has gone up by around 9%, Dominion Energy has revealed. The 2.6GW, fully permitted project is now approximately 50% complete and remains on track for completion at the end of 2026. This is despite estimated total project costs, inclusive of contingency and excluding financing costs, rising from $9.8bn to $10.7bn. This is the first increase since the original project budget was submitted to the Virginia State Corporation Commission (SCC) in November 2021. The increase is attributable to higher network upgrade costs which are assigned by PJM, the regional electric grid operator, to CVOW as part of the generator interconnect process and higher onshore electrical interconnection costs. New electric generation resources constructed within PJM, like CVOW, are assigned costs that are deemed necessary to effectively integrate these resources and ensure the reliability of the grid. Aside from changes to onshore costs, aggregate costs for other project costs, including offshore, have remained in-line with the original budget. Dominion Energy says the project has robust cost-sharing mechanisms in place to protect customers and stakeholders. As a result of the stakeholder settlement approved by the SCC in December 2022, 50% of the updated total project costs above $10.3bn are unrecoverable from customers and are borne by the project owners. As a result of the total project cost update, the expected average impact over the life of the project to a typical residential customer bill using 1,000kWh per month is a 43 cent per month increase, Dominion Energy said. In addition to the cost-sharing mechanisms for customers, Dominion Energy has a non-controlling equity financing agreement with Stonepeak. Under the terms of that agreement, Stonepeak will fund half, or around $450m, of the circa $900m increase in total project costs. Dominion Energy says CVOW continues to achieve significant construction milestones including the installation of the first 16 transition pieces which serve as the junction between the foundation and tower for each of the 176 wind turbines. Delivery of the first of three 4300-tonne offshore substations to the Portsmouth Marine Terminal in Virginia Beach was completed at the end of January. Wind turbine tower and blade fabrication is now underway, with nacelle fabrication to begin later this quarter. |
