DNNGY - Dominion Energy's offshore wind project is powering through despite challenges
2023-10-18 13:30:15 ET
Dominion Energy’s ( NYSE: D ) offshore wind project is beginning its next phase of construction.
The $9.8B offshore wind project in coastal Virginia, which is estimated to power 660,000 homes when completed, will be over 600 feet tall and will have over 170 turbines.
In a CNBC interview on Wednesday, G.T. Hollett, Dominion’s director of Offshore Wind, said the company is shipping pieces of equipment to Portsmouth Marine Terminal to get the project off the ground.
The Coastal Virginia Offshore Wind Project will begin its offshore phase of construction “in earnest next year.”
The industry has been facing numerous headwinds, including rising interest rates and undeveloped supply chains, forcing some developers to renegotiate contracts or walk away from projects entirely, CNBC reported.
The project, however, is getting $3B in IRA credits.
Part of the project’s success is that Dominion Energy ( D ) brought it to Virginia’s State Corporation Commission, which approved the project and its spending plan. Now, about 90% of their costs are locked in.
In addition, Dominion ( D ) forecasts about a $4 increase per month for Virginia ratepayers over the lifespan of this project.
There is a difference between generation owners and transmission owners, and when you have a power purchase agreement, if you don't have a guaranteed offtake power price on the other side, then the cost can change,” CNBC reported.
This was most notably seen with Orsted ( OTCPK:DNNGY ), not getting a high enough power purchase agreement or power offtake price to justify their higher costs.
Dominion’s stock is down 37.39% from last year, and down 35.02% year-to-date. It’s gone downwards since August 2022.
More on Dominion Energy:
- Dominion Energy: A Compelling Buy At Current Levels (Technical Analysis)
- Why Dominion Energy Is Seriously Undervalued Right Now
- ESG Wars: Dominion Takes A Punt On Offshore Wind As Enbridge Piles Up Debt On Risky Gas Bet
- Southern raised while Eversource, Dominion downgraded at Scotiabank
- Dominion Energy proposes new solar projects in Virginia
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Dominion Energy’s offshore wind project is powering through despite challenges