Stonepeak to Acquire 50% Interest in Dominion Energy’s Coastal Virginia Offshore Wind Project

Rhea-AI Summary

Stonepeak acquires 50% interest in Dominion Energy's Coastal Virginia Offshore Wind project, set to be one of the largest offshore wind farms in the U.S. and globally. The 2.6 gigawatt project aims to serve 660,000 homes, with construction starting in spring 2023 and completion expected by 2026.

Insights

Energy Sector Analyst

The acquisition of a 50% interest in the Coastal Virginia Offshore Wind project by Stonepeak from Dominion Energy represents a significant investment in renewable energy infrastructure, signaling a strategic move within the energy sector. The scale of this project, being touted as the largest offshore wind farm in the U.S., indicates a substantial commitment to diversifying energy portfolios and enhancing energy security. For stakeholders, the investment in CVOW aligns with a broader industry trend towards sustainable energy solutions and could potentially offer long-term value through stable, renewable energy production.

From a financial perspective, the project's ability to serve the power needs of 660,000 homes and its contribution to carbon emission reduction—equivalent to removing 1 million cars from the road annually—underscores its environmental and social governance (ESG) impact. This is increasingly relevant to investors who prioritize ESG factors in their investment decisions. Moreover, the partnership leverages Dominion Energy's track record with Stonepeak's infrastructure expertise, which may mitigate risks associated with large-scale construction and operational challenges in offshore wind projects.

Market Research Analyst

The partnership between Stonepeak and Dominion Energy could have broader implications for the energy market, particularly in the context of fuel cost dynamics and energy supply diversification. The projected decrease in fuel costs due to the addition of renewable energy supply from CVOW may influence the regional energy market, potentially leading to more competitive pricing and an altered demand landscape for traditional fossil fuels. Additionally, the project’s advanced stage of development and its downside-protected fundamentals suggest a calculated approach to risk management that could resonate positively with market analysts and investors.

Long-term, the success of CVOW could serve as a benchmark for future offshore wind projects, both in the U.S. and globally. Its completion timeline, set for year-end 2026, offers a clear horizon for market participants to assess its impact on Dominion Energy's operational performance and Stonepeak's investment portfolio. The project's scale and the partnership's focus on energy reliability and security may set a precedent for similar future investments, potentially shaping investor expectations and confidence in the renewable energy sector.

Environmental Policy Expert

The environmental implications of the CVOW project are substantial, with the potential to significantly contribute to the U.S.'s renewable energy targets and carbon emission reduction goals. The project's capacity to avoid substantial carbon emissions annually aligns with national and international climate action objectives. This strategic investment reflects an increasing recognition of the importance of offshore wind energy as a key component in the transition to a low-carbon economy.

Policy-wise, the CVOW project may benefit from current and future governmental incentives aimed at promoting renewable energy, which could enhance its economic viability and attractiveness to investors. Furthermore, the project's contribution to energy security may garner bipartisan support, which is crucial for the stability and predictability of environmental policies affecting renewable energy investments. The collaboration between a private investment firm and a utility company in this venture also exemplifies the type of public-private partnerships that are often instrumental in advancing large-scale renewable energy projects.

Project expected to be the largest offshore wind farm in the U.S. and one of the largest offshore wind farms globally upon completion

NEW YORK--(BUSINESS WIRE)-- Stonepeak, a leading alternative investment firm specializing in infrastructure and real assets, today announced that it has reached an agreement with Dominion Energy (NYSE: D) to acquire a 50% interest in its Coastal Virginia Offshore Wind project (“CVOW” or “the Project”) through the formation of an offshore wind partnership. The Project is expected to be the largest offshore wind farm in the U.S. and one of the largest offshore wind farms globally upon completion.

CVOW is a 2.6 gigawatt offshore wind project 27 miles off the coast of Virginia Beach, Virginia capable of serving the power needs of 660,000 homes. Dominion Energy began developing CVOW in 2013 and is scheduled to begin offshore construction this spring. Construction is expected to be completed by year-end 2026. When fully constructed, each year CVOW will avoid carbon emissions equivalent to removing 1 million cars from the road, and will play an important role in supporting energy security and reliability, and lowering fuel costs by diversifying Dominion Energy customers’ energy supply.

“Having previously partnered with Dominion Energy, we look forward to extending our relationship through CVOW, which is a fitting addition to our global renewables strategy given its potential to provide meaningful renewable capacity to the U.S., advanced stage of development, and downside-protected fundamentals,” said Rob Kupchak, Senior Managing Director at Stonepeak. “Dominion Energy’s impressive track record building and operating large-scale infrastructure projects paired with Stonepeak’s experience successfully constructing offshore wind assets gives us confidence in CVOW’s path forward, and we are excited to partner with Dominion in delivering this critical renewable energy generation resource to its customers.”

Dominion Energy will continue to oversee CVOW’s day-to-day operations and construction at close, supported by Stonepeak’s expertise in investing in and delivering large and complex renewables and energy infrastructure projects including offshore wind. The transaction is subject to customary and regulatory approvals and is expected to be completed by the end of 2024.

Vinson & Elkins LLP served as legal advisor to Stonepeak. Mizuho Securities USA, through its affiliate Greenhill & Co., and Santander US Capital Markets LLC served as co-financial advisors.

To learn more about Coastal Virginia Offshore Wind, please visit https://coastalvawind.com/about-offshore-wind.aspx.

About Stonepeak

Stonepeak is a leading alternative investment firm specializing in infrastructure and real assets with approximately $61.1 billion of assets under management. Through its investment in defensive, hard-asset businesses globally, Stonepeak aims to create value for its investors and portfolio companies, with a focus on downside protection and strong risk-adjusted returns. Stonepeak, as sponsor of private equity and credit investment vehicles, provides capital, operational support, and committed partnership to grow investments in its target sectors, which include communications, energy and energy transition, transport and logistics, and real estate. Stonepeak is headquartered in New York with offices in Hong Kong, Houston, London, Singapore, and Sydney. For more information, please visit www.stonepeak.com.

About Dominion Energy

About 7 million customers in 15 states energize their homes and businesses with electricity or natural gas from Dominion Energy (NYSE: D), headquartered in Richmond, Va. The company is committed to providing reliable, affordable, and increasingly clean energy every day and to achieving Net Zero emissions by 2050. Please visit DominionEnergy.com to learn more.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240221428505/en/

Stonepeak

Kate Beers / Maya Brounstein

corporatecomms@stonepeak.com

+1 (646) 540-5225

Dominion Energy

Media: Ryan Frazier

C.Ryan.Frazier@dominionenergy.com

+1 (804) 836-2083

Investor Relations: David McFarland

David.M.McFarland@dominionenergy.com

+1 (804) 819-2438

Source: Stonepeak

FAQ

What is the name of the offshore wind project Stonepeak acquired a 50% interest in?

Stonepeak acquired a 50% interest in Dominion Energy's Coastal Virginia Offshore Wind project.

Where is the Coastal Virginia Offshore Wind project located?

The project is located 27 miles off the coast of Virginia Beach, Virginia.

What is the capacity of the Coastal Virginia Offshore Wind project?

The project has a capacity of 2.6 gigawatts, capable of serving 660,000 homes.

When is the construction of the Coastal Virginia Offshore Wind project expected to be completed?

Construction is scheduled to be completed by year-end 2026.

What environmental impact is expected from the Coastal Virginia Offshore Wind project?

The project is expected to avoid carbon emissions equivalent to removing 1 million cars from the road annually.