Dominion Energy subsidiary Virginia Electric and Power Co. plans to purchase the Kitty Hawk North offshore wind lease off North Carolina and associated developments from Avangrid for about $160 million, the Virginia-based utility said July 8.

Avangrid will retain ownership of the Kitty Hawk South lease.

The 40,000-acre Kitty Hawk North lease could support 800 megawatts of offshore wind generation capacity in the 2030s, if approved by regulators and constructed. That would be enough capacity to serve about 200,000 homes and businesses, Dominion Energy said.

The lease site, which will be named CVOW-South, is located about 25 miles south of the 2.6-gigawatt (GW) Coastal Virginia Offshore Wind project that Virginia Electric and Power Co. is developing.

“This transaction gives our company another potential option to meet that growing demand in a size and on a timeframe that is consistent with the regulated business mix, credit, and risk profile objectives of the recently concluded business review,” said Dominion Energy CEO Robert Blue. “It also allows us to leverage the unique expertise we’ve gained during the very successful development and construction to date of the Coastal Virginia Offshore Wind (CVOW) commercial project, which reduces project risk to the benefit of customers and shareholders.”

CVOW is scheduled to begin operations in 2026.

The transaction is expected to close in fourth-quarter 2024, subject to required approvals.

The deal comes as Avangrid advances its strategic priorities and seeks capital for reinvestment.

“Executing this agreement allows us to move forward with our long-term plans for the development of Kitty Hawk South, further demonstrating our commitment to accelerating the clean energy transition in the United States,” Avangrid CEO Pedro Azagra said.

Kitty Hawk South could deliver up to 2.4 GW of power, according to Avangrid. The company is also developing Vineyard Wind 1 and New England Wind. Both are located offshore Massachusetts.