Dominion sells 50% stake in Coastal Virginia Offshore Wind project

Dominion Energy's Coastal Virginia Offshore Wind pilot turbines. Courtesy: Dominion Energy

As part of an initiative to reduce its debt, Dominion Energy has closed on a transaction to sell a 50% non-controlling interest in the 2.6-gigawatt (GW) Coastal Virginia Offshore Wind (CVOW) project to alternative investment firm Stonepeak.

Dominion will retain full control over the construction and operations of the project, which continues to proceed “on time and on budget,” according to the utility. Stonepeak will have customary minority rights.

At closing, Dominion received proceeds of $2.6 billion, representing reimbursement of approximately 50% of project-to-date capital investment. Stonepeak will also fund half of the remaining project costs as they are incurred, subject to certain previously disclosed conditions.

Robert M. Blue, Dominion Energy chair, president, and CEO says Stonepeak’s financial participation in CVOW “will benefit both the project and the people who will rely on electricity from CVOW to keep the lights on and fuel economic growth in the Commonwealth.”

“This transaction achieves several key objectives including: adding an attractive, well-capitalized, and high-quality partner; establishing robust cost-sharing that provides meaningful protection from any unforeseen project cost increases; and improving our quantitative and qualitative business risk profile through the creation of a highly credit-positive partnership,” Blue asserted when the deal was first announced back in February.

CVOW, situated off the shore of Virginia Beach, is the largest offshore wind farm currently under construction in the United States. Its first monopile was installed in May of this year. If the project stays on schedule, it will provide renewable energy for up to 660,000 homes via 176 wind turbines once fully operational in late 2026.

By closing this transaction with Stonepeak, Dominion Energy has completed its business review debt reduction initiatives. During the review, the company said it reduced its debt by approximately $21 billion. With the closings of the Cove Point LNG, East Ohio Gas, Questar Gas and Wexpro, and Public Service Company of North Carolina sales; and completion of the fuel securitization at Dominion Energy Virginia and the offshore wind partnership, Dominion has now achieved 100% of its business review target. The company says those moves improved its balance sheet, reduced its risk profile, and established a renewed focus as a pure-play, state-regulated electric utility business.

In its 2024 Integrated Resource Plan (IRP) recently filed with the Virginia State Corporation Commission (SCC) and the North Carolina Utilities Commission (NCUC), Dominion Energy Virginia laid out multiple portfolio options to meet rising power demand through significant investments in new generation of all ilks. Nearly 80% of the plan’s incremental power generation over the next 15 years is carbon-free, including about 3.4 GW of new offshore wind in addition to CVOW. The IRP is based on a forecast developed by regional transmission operator PJM Interconnection which projects that power demand will continue growing at unprecedented levels in the coming decades. Power demand within the RTO’s delivery zone is forecasted to grow 5.5% annually for the next decade and to double by 2039.

“We are experiencing the largest growth in power demand since the years following World War II,” said Ed Baine, president of Dominion Energy Virginia. “No single energy source, grid solution, or energy efficiency program will reliably serve the growing needs of our customers. We need an ‘all-of-the-above’ approach, and we are developing innovative solutions to ensure we deliver for our customers.”

Trump’s ‘unpredictability’ shakes investors – This Week in Cleantech

This Week in Cleantech is a weekly podcast covering the most impactful stories in cleantech and climate in 15 minutes or less.
wind turbines in front of an orange sunset

Renewables permitting has been ‘paralyzed’ by Trump – This Week in Cleantech

This Week in Cleantech is a weekly podcast covering the most impactful stories in cleantech and climate in 15 minutes or less.