Dominion rises after guiding for cheaper wind power at Coastal Virginia project (NYSE:D) - Seeking Alpha
Dominion rises after guiding for cheaper wind power at Coastal Virginia project (NYSE:D) | Seeking Alpha
Dominion rises after guiding for cheaper wind power at Coastal Virginia project
Dominion Energy, Inc. (D) By:
Carl Surran, SA News Editor
1 Comment Zach Gibson/Getty Images News
Dominion Energy (NYSE: D) +3.8% in Friday's trading after reporting in-line Q3 adjusted earnings while saying it expects to deliver power at a cheaper price than originally expected from its planned Coastal Virginia Offshore Wind project.
Dominion ( D) said in an investor presentation that it expects to produce electricity at Coastal Virginia for $77/MWh, down from earlier forecasts of $80-$90/MWh, and the project's capital budget remains at $9.8B.
The company said the project is now 77% complete and continues to expect the completion of construction by the end of 2026.
The 2.6 GW wind farm won final approval from federal regulators earlier this week and is progressing even as much of the U.S. wind industry is facing significant problems.
Dominion ( D) is "in the advanced stages of a process to identify a non-controlling equity financing partner in the project," CEO Bob Blue said. "The process has driven considerable interest from attractive and high-quality potential counterparties."
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Related Knowledge Center: Offshore wind energy
Over the next decade, U.S. offshore wind power is expected to grow from a single 30-megawatt wind farm off Rhode Island to more than 2,000 MW of capacity along the Atlantic Seaboard. There are contracts for wind power off the coasts of Massachusetts, Connecticut, New York, Maryland, New Jersey, Rhode Island, and Virginia.
The National Renewable Energy Laboratory has estimated the United States has over 4,000 gigawatts (GW) of offshore wind potential, enough to power the country four times over.
The growth in part being spurred by state solicitations, including in New York, where then-Gov. Andrew Cuomo (D) set a commitment of 9,000 MW of offshore wind by 2035, and in Connecticut, where in June 2021, Gov. Ned Lamont (D) signed legislation authorizing the construction of 2,000 MW of offshore wind by 2030.
The offshore development is also being driven by an investment tax credit set to end in December 2019 and is equal to 12 percent of expenditures. U.S. Sens. Susan Collins (R-Maine) and Tom Carper (D-Del.) have introduced a bill to extend the tax credit for up to eight years.
The Interior Department has held eight competitive lease sales that resulted in 15 offshore wind leases over 1.7 million acres that has the potential for 21 GW of capacity. In February 2022, the Bureau of Ocean Energy Management completed a bidding process that realized $4.37 billion for 488,000 acres across six lease areas in federal waters off New York and New Jersey.
Projects have also been proposed off the Southeast coast, off California and Hawaii, and for the Great Lakes.