Dominion Energy, one of the largest utilities in the US, has announced a deal with Stonepeak, a private equity firm, to sell a 50% stake in its Coastal Virginia Offshore Wind (CVOW) project. The deal, which is subject to regulatory approvals, is expected to close by the end of 2024 and bring in nearly $3 billion for Dominion Energy.
CVOW: A Milestone for Clean Energy
The CVOW project is one of the largest and most ambitious offshore wind projects in the US. It will consist of 176 turbines and three offshore substations, covering an area of 113,000 acres off the coast of Virginia Beach. The project will have a capacity of 2.6 gigawatts (GW), enough to power 660,000 homes and businesses. The project is expected to be completed by late 2026 and create thousands of jobs during construction and operation.
The CVOW project is part of Dominion Energy’s commitment to achieve net-zero carbon and methane emissions by 2050. The company has also invested in solar, battery storage, and hydrogen projects to diversify its energy portfolio and reduce its environmental impact. The CVOW project will also contribute to Virginia’s goal of reaching 100% clean energy by 2045.
Stonepeak: A Strategic Partner for CVOW
Stonepeak is a leading infrastructure investor with more than $61 billion in assets under management. The firm has experience in investing in large and complex energy projects, including offshore wind, natural gas, and renewable power. Stonepeak will acquire a 50% non-controlling interest in a newly formed subsidiary of Dominion Energy Virginia, which will be a public utility based in Virginia. Stonepeak will share the costs and risks of the CVOW project with Dominion Energy, while Dominion Energy will retain full operational control and responsibility for the project.
The deal will provide several benefits for both parties, according to Dominion Energy’s chair, president, and CEO, Bob Blue. He said that the deal will improve the risk profile of the project by establishing cost-sharing that provides “meaningful protection for any unforeseen project cost increases”. He also said that the deal will reduce the financing needs of Dominion Energy during construction and improve its credit rating. He praised Stonepeak as a “compelling partner” and a “world-class infrastructure investor” for the CVOW project.
A Bright Future for Offshore Wind in the US
The CVOW project is one of the first large-scale offshore wind projects in the US, which has lagged behind Europe and Asia in developing this renewable energy source. However, the US has a huge potential for offshore wind, with more than 2,000 GW of capacity along its coasts, according to the Department of Energy. The Biden administration has set a target of deploying 30 GW of offshore wind by 2030, which would create tens of thousands of jobs and avoid 78 million metric tons of carbon emissions.
The CVOW project is expected to be a catalyst for the offshore wind industry in the US, as it will demonstrate the feasibility, reliability, and affordability of this technology. The project will also spur the development of a domestic supply chain and workforce for offshore wind, as well as foster innovation and collaboration among stakeholders. The project will also provide environmental and economic benefits for Virginia and the region, as it will reduce greenhouse gas emissions, lower electricity costs, and enhance grid resilience.
Comments