In early August, state regulators approved the project but with a requirement that Dominion file a notice within 30 days if the final project costs are projected to escalate.
Customers are also to be “held harmless” for any shortfall in output below an annual net capacity factor of 42%, as measured on a three-year rolling average, said the State Corporation Commission (SCC).
Modern offshore wind farms often have a capacity factor of 40-50%, but a regulator requiring that level of performance is unprecedented in the US.
The $9.8 billion 176-turbine project, the largest currently proposed off the US, would be sited 43 km off Virginia Beach, Virginia, and come online in 2026.
The performance requirements are “untenable”, said Dominion in a request for a rehearing filed with the SCC, which was accepted this week.
“As ordered, it will prevent the project from moving forward, and the Company will be forced to terminate all development and construction activities,” said Dominion in its filing.
The performance standard is too broad and would make the utility responsible for unanticipated events such as “acts of war or terror, catastrophic weather events or changes in weather patterns [and] system operating constraints unrelated to the generator, such as curtailments from the grid operator or economic curtailments,” argued Dominion
The utility had previously projected that the project could have a capacity factor ranging from 38% and 46% over its 30-year lifespan.
Dominion is also arguing that only lawmakers not regulators have the authority to impose such a performance condition.
Virginia’s Clean Economy Act, which set the scene for the mega-project, requires at least 5.2 GW of offshore wind power to be developed in the state by 2034.
The project is to use Siemens Gamesa Renewable Energy (SGRE) SG 14-222 DD. Halting the project could be a blow to SGRE, which – like other wind turbine makers -- is suffering from thin profit margins.
Dominion’s nearby two-turbine 12MW pilot project, with two SGRE turbines and developed by Ørsted, came online in 2020.