Dominion Energy has increased the estimated price tag of the 2640MW Coastal Virginia Offshore Wind (CVOW) project to $9.8 billion, from an earlier estimate of $8 billion made in September 2019.
News of the 22.5% cost hike came in a press release issued on 5 November and in a Q3 earnings call the same day.
In the conference call, the CEO, chair and president of the utility, Bob Blue, told analysts that the increase could be attributed to “commodity and general cost pressures” and the completion of the conceptual design phase for the onshore transmission route.
Supply chain problems, including escalating steel and aluminium and shipping costs, as well as delays, have been dogging the industry and may last for some quarters yet.
The vast project, 42km off the coast of Virginia Beach, is due to come online in 2026. The nearby 12MW Coastal Virginia Offshore Wind (CVOW) - Pilot project was commissioned in 2020 and is only the second offshore wind farm in the Americas.
Dominion has revised the lifetime capacity factor of the 2.6GW project to 43.3%, up from 41.5%, Blue told analysts.
“After further evaluation of turbine design and wind resources, in addition to the real-time data we've gathered from our [pilot] turbines, we've determined that our original assumption was too low,” he said.
The long-term costs to customers of the project will be $87/MWh, he said. That is at the higher end of the utility’s previously guided levelised cost of energy range of $80-90 per MWh.
Dominion has named Siemens Gamesa as the preferred turbine supplier for CVOW, and has said it will install 180 x SG 14-222 DD turbines. Siemens Gamesa recently announced it would build the US’s first offshore wind blade plant, in Virginia.
Dominion, the largest utility in Virginia, on 5 November applied to the State Corporation Commission for permission to build the 2.64GW project. The commission regulates utilities and their spending.
It also announced new suppliers for CVOW. EEW SPC will make steel monopile foundations. Bladt Industries will supply the transition pieces, while a joint venture between Bladt and Semco Maritime will supply three offshore substations. Deme Offshore US and Prysmian Group have been selected for transportation and installation of the balance of plant and for subsea cable supply.