Dominion Energy announced that it reached an agreement to acquire the Kitty Hawk North Wind offshore wind lease and associated developments from Avangrid, Inc. for nearly $160 million.
The lease involves 40,000 acres and a payment of around $3,000 per acre. This amount is included in the $160 million decided for the acquisition of the offshore wind lease.
If regulators approve and the project is built, it would be capable of producing 800 MW, which is sufficient to power 200,000 homes and businesses.
Additionally, the project would be linked to the company’s transmission grid. The company currently does not have specific estimates for the cost or the date when the project would become operational.
These estimates will be developed in the future stages of the project’s development.
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Robert M. Blue, chair, president and chief executive officer of Dominion Energy, said, “With electric demand in our Virginia territory projected to double in the next 13 years, Dominion Energy is securing access to power generation resources that ensure we continue to provide the reliable, affordable, and increasingly clean energy that powers our customers every day.”
He added, “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.”
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The offshore wind lease will expand Dominion Energy’s Coastal Virginia Offshore Wind (CVOW) project.
After the acquisition, the Kitty Hawk North Wind offshore wind lease, which has a potential of 2.4 gigawatts, will be renamed CVOW-South. The deal is expected to be sealed by Q4 of this year.
The company expects the CVOW-South will be launched and connected to its transmission grid in 2030. Once the project goes live, it will be able to power nearly 200,000 homes and businesses.