Dominion Energy has agreed to acquire the Kitty Hawk North Wind offshore wind lease and associated developments from Avangrid for approximately $160m.
The deal for the site, now known as CVOW-South, is inclusive of a payment of about $3000 per acre for the nearly 40,000-acre lease.
If approved by regulators and constructed, CVOW-South would have a capacity of 800MW and the project would connect to the company’s transmission grid.
Dominion Energy is acquiring the CVOW-South through its subsidiary Virginia Electric and Power Company.
After receipt of necessary approvals from the Bureau of Ocean Energy Management and the City of Virginia Beach, Dominion Energy and Avangrid expect to close the transaction in the fourth quarter of 2024.
Robert Blue, chair, president and chief executive officer of Dominion Energy, said: “With electric demand in our Virginia territory projected to double in the next 13 years, Dominion Energy is securing access to power generation resources that ensure we continue to provide the reliable, affordable, and increasingly clean energy that powers our customers every day.
“This transaction gives our company another potential option to meet that growing demand in a size and on a timeframe that is consistent with the regulated business mix, credit, and risk profile objectives of the recently concluded business review.
“It also allows us to leverage the unique expertise we’ve gained during the very successful development and construction to date of the Coastal Virginia Offshore Wind (CVOW) commercial project, which reduces project risk to the benefit of customers and shareholders.
“The Virginia model for regulated offshore wind development is proving to be an enabler of on-time and on-budget wind generation at exceptional relative value for our customers and is the model we would intend to pursue for any future offshore wind development.”
Virginia Electric and Power Company, a subsidiary of Dominion Energy, is constructing the 2.6GW CVOW, located about 25 miles north of the CVOW-South lease.
CVOW continues to be on-time and on-budget with in-service expected by the end of 2026.
To date, 25 monopiles have been installed since the installation campaign began in May, consistent with the company’s target of 70-100 monopiles during the first of two installation seasons that run through the end of October.
The company is aware of the community concerns regarding the proposed landing site in Sandbridge and is committed to working closely with the community, the Commonwealth of Virginia and the City of Virginia Beach as it considers this project.