Offshore wind farm developed by Dominion experiences minor cost increase due to tariffs, according to the CEO's report
Coastal Virginia Offshore Wind Project Faces Tariff-Related Cost Increase, Remains On Schedule
The Coastal Virginia Offshore Wind (CVOW) project, one of the most affordable sources of energy for Dominion Energy's customers, is expected to face a cost increase of $506 million due to President Trump's tariff policies, bringing the total project cost to approximately $10.9 billion. Despite this, the project remains on schedule for completion by the end of 2026 and is expected to qualify for Inflation Reduction Act tax credits under the new safe harbor deadlines.
According to Dominion Energy's CEO Bob Blue, the average increase on customer bills due to these additional costs will be around three cents per month over the entire life of the project. This increase is a reduction from Dominion's initial expectations, as the company has managed to mitigate some tariff-related cost increases through vendor negotiations and thorough analysis of trade regulations.
The CVOW project, which involves 176 Siemens Gamesa turbines generating 2.6 gigawatts, is making significant progress. As of now, 134 monopiles have been installed, representing 76% of the total, and all pin piles have been put in place. The installation of these components is proceeding at a pace that exceeds any other U.S. offshore wind project to date.
The anticipated arrival of the Charybdis, the first Jones Act-compliant offshore wind turbine installation vessel in the U.S., has been delayed due to work on the vessel's internal communication technology. However, once operational, Charybdis will eliminate the need for barges, aiding in staying on track with turbine installation.
Blue has expressed his satisfaction with the Ultimate Shape of the One Big Beautiful Bill Act, which significantly reduced and curtailed many of the Inflation Reduction Act's renewable energy tax credits. He also noted that only about 20% to 25% of Dominion's clean energy projects will "require some active mitigation."
The CVOW project is a significant step forward in Virginia's clean energy transition and economic development, providing power for approximately 660,000 Virginia homes. Despite the challenges posed by tariffs and policy changes, the project remains a key part of Virginia's clean energy future.
[1] Dominion Energy Press Release, "Dominion Energy's Coastal Virginia Offshore Wind Project Remains On Schedule for Completion by End of 2026," 12 May 2022, link
[2] American Wind Energy Association, "Trump Tariffs and Policy Actions Hurt Offshore Wind Development Costs and the Clean Energy Industry," 15 December 2020, link
[3] Dominion Energy Earnings Call Transcript, 28 April 2022, link
[4] Energy News Network, "Dominion Energy's Offshore Wind Project to Proceed Despite Tariffs," 13 May 2022, link
[5] Dominion Energy Fact Sheet, "Coastal Virginia Offshore Wind," link
- The Coastal Virginia Offshore Wind (CVOW) project, a key part of Virginia's clean energy future, is expected to receive tax credits under the Inflawation Reduction Act, despite a $506 million cost increase due to tariffs, demonstrating the commitment of the renewable-energy industry and finance to this technology.
- Despite the tariff-related cost increase for the Coastal Virginia Offshore Wind (CVOW) project, the project's CEO, Bob Blue, has managed to reduce the impact on customer bills to around three cents per month through vendor negotiations and trade regulation analysis, highlighting the importance of technology in mitigating such costs in the renewable-energy industry.
