Dominion Energy has announced the acquisition of the Kitty Hawk North Wind offshore lease from Avangrid for approximately $160 million. This lease, renamed CVOW-South, could enable the development of up to 800 MW of offshore wind capacity in the 2030s, meeting Virginia’s growing demand for electric power.
Acquisition strategy for energy growth
The lease covers nearly 40,000 acres and includes a payment of $3,000 per acre, with development costs of $43 million. Dominion Energy expects to finalize the transaction in the fourth quarter of 2024, subject to regulatory approval. This acquisition enables Dominion Energy to secure energy resources to meet growing demand.
With electricity demand expected to double over the next 13 years in Virginia, this acquisition is in line with Dominion Energy’s strategy of providing reliable, affordable energy. This initiative also strengthens the company’s ability to plan future regulated power generation projects.
Offshore development and expertise
Dominion Energy’s offshore wind development model, already proven with the 2.6 GW Coastal Virginia Offshore Wind (CVOW) project, continues to progress on time and on budget. The project, located some 25 miles north of CVOW-South, is scheduled to go into service by the end of 2026.
Robert M. Blue, President and CEO of Dominion Energy, points out that this transaction gives the company an additional option to meet the growing demand for energy in a timeframe compatible with their commercial and financial objectives. Dominion Energy also intends to leverage the expertise acquired during the development of the CVOW project to reduce future risks.
Outlook and commitments
Dominion Energy is aware of community concerns regarding the proposed landing site at Sandbridge, Virginia, and is committed to working closely with local stakeholders to ensure smooth implementation of the project. Approval from the Bureau of Ocean Energy Management and the City of Virginia Beach is essential to finalize the transaction with Avangrid.
This strategic acquisition positions Dominion Energy to respond effectively to future energy demand while securing the resources they need for growth.
