CVOW offshore wind project remains on schedule but cost increases

Due to be completed at the end of 2026, CVOW Commercial has achieved several significant construction milestones, including installation of the first 16 transition pieces for the wind turbines.

Delivery of the first of three offshore substations to the Portsmouth Marine Terminal in Virginia Beach took place at the end of January. Fully fabricated monopiles, transition pieces, undersea cable and other major components continue to be delivered in preparation for on-schedule installation. Wind turbine tower and blade fabrication is now underway, with nacelle fabrication to begin later this quarter, and Charybdis – the first American built, flagged, and crewed wind turbine installation vessel – is 96% complete and has commenced sea trials.

However, the company also confirmed that estimated total project costs, including contingency and excluding financing costs, have increased approximately 9%, from US$9.8Bn to US$10.7Bn.

The company noted this is the first and only increase since the original project budget was submitted to the Virginia State Corporation Commission in November 2021.

Relative to the original budget, the cost increase is attributable to higher network upgrade costs which are assigned by PJM, the regional electric grid operator, to CVOW as part of the generator interconnect process and higher onshore electrical interconnection costs.

Apart from these changes to onshore costs, aggregate costs for other aspects of the project have remained in line with the original budget.

“The project remains an affordable source of electricity for Dominion Energy Virginia customers with robust cost-sharing mechanisms that protect customers and shareholders,” said the company. “As a result of the project cost update, the expected average impact over the life of the project to a typical residential customer bill using 1,000 kWh per month is a US$0.43 per month increase. The project’s updated levelised cost of energy of ~US$62, compared with the prior estimate in November 2024 of US$56, continues to benchmark very favourably with new generation alternatives including solar, battery and gas-fired generation.”