Equinor, Dominion Energy Secure Central Atlantic Offshore Wind Lease Areas

August 14, 2024, by Adrijana Buljan

Equinor and Virginia Electric and Power Co, a subsidiary of Dominion Energy, have provisionally won lease areas in the Central Atlantic offshore wind auction in the US, each securing one site. The auction, which yielded almost USD 93 million (around EUR 84 million), saw a total of six companies participating.

Equinor is provisionally awarded the OCS-A 0557 lease area which the developer secured with a bid of USD 75 million (around EUR 68 million). The lease area is located approximately 26 nautical miles (approximately 48 kilometres) from Delaware Bay and covers 101,443 acres (around 410 square kilometres).

Virginia Electric and Power Co provisionally won the OCS-A 0558 lease area with a bid of around USD 17.7 million (around EUR 16 million). This area spans 176,505 acres (approx. 714 square kilometres) and is located some 35 nautical miles (almost 65 kilometres) from the entrance of Chesapeake Bay.

The Central Atlantic lease sale also resulted in over USD 23 million (around EUR 21 million) in total bidding credits. These bidding credits will result in over USD 11 million (around 10 million) in investments for workforce training and domestic supply chain, and an additional USD 11 million for fisheries compensatory mitigation.

Announcing the lease sale at the end of June, the Bureau of Ocean Energy Management (BOEM) said the two areas could accommodate up to 6.3 GW of offshore wind capacity.

Following the announcement of provisional winners by the US Department of the Interior (DOI) and BOEM, Equinor issued a press release saying its area has around 2 GW of capacity, enough to power approximately 900,000 US homes.

The company said its provisional win in the Central Atlantic builds off recent offshore wind milestones on the East Coast, with construction ongoing at the South Brooklyn Marine Terminal and offshore work underway to support the Empire Wind 1 project.

“Today’s announcement underscores Equinor’s commitment to delivering value through renewable projects. This is a long-term option with first power post-2035. Developing this lease area will draw upon Equinor’s proven capabilities in offshore wind. We will take a disciplined approach to minimize risk and mature a robust project in our portfolio”, said Pål Eitrheim, executive vice president of Equinor Renewables.

The company noted that it would now work with BOEM to certify the lease and that the Central Atlantic site would be added to its existing US offshore wind portfolio after regulatory approvals.

Equinor’s OCS-A 0557 lease area in the Central Atlantic; Image: Equinor

Dominion Energy, which is currently building the biggest US offshore wind farm off Virginia, said that winning the Central Atlantic lease area provides the company with the option to pursue additional offshore wind development in the mid-Atlantic.

BOEM indicates Dominion’s lease area could support between 2.1 GW and 4 GW of offshore wind generation capacity.

In early July, the company announced the acquisition of the Kitty Hawk Wind North offshore wind lease area from Avangrid, which Dominion will rename CVOW South. At this time, the company does not have an estimated timeline or cost for the development of either CVOW South or the new leasehold, Dominion said.

“Offshore wind is critical to our all-of-the-above approach to meet the unprecedented growth of our customer electric demand over the next decade”, said Robert M. Blue, chair, president and chief executive officer of Dominion Energy. “Winning this lease area gives us another low-cost option to meet that growing demand while providing our customers with reliable, affordable and increasing clean energy”.