Dominion to sell 50% stake in US largest offshore wind project CVOW to Stonepeak for $3bn
Virginia-based utility to form subsidiary with New York-based partner but will retain full control of construction and operations of 2.6GW array
Utility developer Dominion Energy on Thursday announced the sale of a 50% equity stake for $3bn in its massive, 2.6GW Coastal Virginia Offshore Wind (CVOW) project, the largest in the US, to New York-based infrastructure firm Stonepeak.
Under the terms, subject to approval by utility regulator State Corporation Commission (SCC), the utility will form a subsidiary with Stonepeak while retaining control over the project’s construction and operations.
“A competitive partnership process attracted high-quality interest resulting in a compelling partner for CVOW,” said Dominion CEO Bob Blue.
CVOW “continues to proceed on-time and on-budget and consistent with our previously communicated timing and cost expectations,” he added.
Stonepeak’s “significant financial participation will benefit both our project and our customers.”
Dominion has invested approximately $3bn into CVOW and expects “to spend an additional ~$3bn by year-end 2024,” according to company spokesperson Jeremy Slayton, for a total $6bn.
Stonepeak has more than $61bn in assets under management and an extensive track record of investment in large and complex energy infrastructure projects including the 376MW Formosa 2 offshore wind project in Taiwan.
CVOW “is a fitting addition to our global renewables strategy given its potential to provide meaningful renewable capacity to the US, advanced stage of development, and downside-protected fundamentals,” said Rob Kupchak, senior managing director at Stonepeak.
“Dominion Energy’s impressive track record building and operating large-scale infrastructure projects paired with Stonepeak’s experience successfully constructing offshore wind assets gives us confidence in CVOW’s path forward.”
Dominion is the only rate regulated utility independently developing an offshore wind project in the US.
Dominion is developing CVOW as if it were a conventional power project, subject to oversight by SCC but with “riders” guaranteeing returns on investment, but with a ceiling on cost exposure for ratepayers.
Dominion estimates CVOW's levelised cost of energy (LCOE) at $77/MWh, less than previous estimates of $80-90/MWh and well below the state cap of $125/MWh, with capacity factors around 46%, based on performance of the utility’s 12MW pilot project in operation since 2020.