Dominion Energy’s gigantic 2.6-gigawatt Coastal Virginia Offshore Wind (CVOW) project is about halfway to its planned completion by year-end 2026, the company said Feb. 3, but costs have swelled by 9% to $10.7 billion.

“This is the first and only increase since the original project budget was submitted to the Virginia State Corporation Commission (SCC) in November 2021, approximately 39 months ago,” Dominion Energy said in news release. “Relative to the original budget of $9.8 billion, the cost increase is attributable to higher network upgrade costs which are assigned by PJM, the regional electric grid operator, to CVOW as part of the generator interconnect process and higher onshore electrical interconnection costs.”

The rise in network upgrade cost estimates reflect significant demand growth that require more systemwide generation and transmission resources.

Dominion Energy delivered the project update prior to the company’s Feb. 12 fourth-quarter 2024 earnings call as offshore wind in the U.S. faces scrutiny by the Trump administration. In January, an executive order temporarily halted new wind leasing and permitting. Many offshore wind players had already battled inflation, supply chain issues and higher interest rates.

CVOW is the largest U.S. offshore wind farm being developed. With 176 Siemens Gamesa turbines and three offshore substations, CVOW will provide enough electricity to power more than 660,000 homes when complete, according to Dominion Energy.

Among the construction milestones, according to the news release, were the installation of the first 16 transition pieces that serve as the junction between the foundation and tower of each wind turbine; and delivery of the first of three 4,300-ton offshore substations. The wind turbine installation vessel—Charybdis—is 96% complete with sea trials underway along with fabrication of wind turbine towers and blades.

Dominion Energy said CVOW maintains a $222 million contingency, up from about $100 million since its last update. Under a cost-sharing agreement, Dominion’s partner Stonepeak Infrastructure Partners will fund half of the approximately $900 million project cost increase.

“As a result of the total project cost update, the expected average impact over the life of the project to a typical residential customer bill using 1,000 kWh per month is a 43 cent per month increase,” Dominion said. “The project’s updated levelized cost of energy (LCOE) of ~$62 (vs. the prior estimate in November 2024 of $56) continues to benchmark very favorably with new generation alternatives including solar, battery and gas-fired generation.”

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