Dominion Energy, the Virginia-based utility, laid out plans Thursday for a 2.6-gigawatt offshore wind project off its home state’s coastline. It’s the largest offshore wind project put forward so far in the accelerating U.S. market.
Dominion plans to construct the project in three 880-megawatt phases from 2024 to 2026, completing one phase per year some 27 miles off the coast of Virginia Beach. Dominion will draw from the lessons it learns from its 12-megawatt Coastal Virginia Offshore Wind pilot project, which recently began construction and is due online next year — likely becoming the second U.S. project to cross the finish line.
Dominion has filed an interconnection request for its 2.6-gigawatt project with PJM, the grid operator for much of the East Coast and Midwest.
Dominion is unique in being the only major utility to exclusively hold the rights to a large offshore wind zone in federal waters near its own service territory. It secured the tract in the offshore market’s second-ever competitive lease auction in 2013 for a mere $1.6 million*. Rather than developing the project and competing for an offtake deal, like most developers must, Dominion will instead be looking to build the project for its own generation needs.
The project will, however, face regulatory scrutiny in Virginia, where the $300 million price tag for Dominion’s 12-megawatt pilot project has raised eyebrows.
Several other East Coast utilities, including New Jersey’s PSEG and New England’s Eversource, are invested in offshore wind projects near their service territories, but none is an exclusive project owner.
Given its lack of experience offshore, Dominion has partnered with Denmark’s Ørsted, the world’s leading offshore wind developer, for its Coastal Virginia pilot. Siemens Gamesa will supply two 6-megawatt turbines for that project. Ørsted does not yet have a formal role at the 2.6-gigawatt project, but it does have the exclusive rights to discuss an expanded partnership with Dominion — potentially further expanding its leading position in the U.S. market.
Separately on Thursday, Ørsted named GE the preferred turbine supplier for two U.S. offshore projects totaling more than 1.2 gigawatts.
Dominion’s announcement comes two days after Virginia Governor Ralph Northam signed an executive order requiring 30 percent of the state’s electricity to come from renewable sources by 2030 and a zero-carbon grid by 2050. As part of that executive order, Northam specifically called for the “full development” of Dominion’s offshore wind zone by 2026.
While it has become a major owner of solar capacity, Dominion has faced criticism from some big corporations in its service area for not building renewables capacity more quickly. The utility recently announced plans for its first grid battery storage projects.
The article originally said the zone was leased for $1.3 million. In fact, it went for $1.6 million.
Wood Mackenzie is hosting an invite-only analyst briefing on the U.S. offshore wind sector in Boston the morning of Wednesday, October 23. Email email@example.com to express interest in attending.