In February 2024 Dominion Energy agreed to sell half of the Coastal Virginia Offshore Wind project to Stonepeak Infrastructure Partners. The number that travelled was $3 billion. Dominion actually received $2.6 billion at closing, and Enerdatics values the transaction at more than $5 billion. All three figures describe the same deal. Only one of them describes what Stonepeak signed up to pay.
Key takeaways
- Stonepeak Infrastructure Partners agreed on 22 February 2024 to buy a 50 percent stake in Dominion Energy's 2.6 GW Coastal Virginia Offshore Wind (CVOW) project, and the transaction completed on 22 October 2024.
- Dominion received $2.6 billion at closing, adjusted down from the initially agreed $3 billion, representing reimbursement of roughly half of CVOW's project-to-date capital investment less a $145 million initial withholding.
- Enerdatics values the CVOW stake at $5,045 million: Stonepeak's $4.9 billion share of the $9.8 billion project budget plus the $145 million withholding, which Enerdatics believes is effectively a development premium payable to Dominion.
- The partners share construction costs 50/50 up to a total of $11.3 billion excluding financing costs; between $11.3 billion and $13.7 billion Stonepeak can choose whether to contribute, and Dominion covers 67 to 83 percent of any surplus Stonepeak does fund.
- CVOW comprises 176 turbines and three offshore substations off Virginia Beach, is expected to be operational in 2027, and its power is offtaken by Dominion Energy for 20 years at $93.1 per MWh.
Why does the headline price understate what Stonepeak is paying?
Because the cheque at closing only covers the past. The up-front consideration reimburses Dominion for half of what had already been spent on CVOW by the time the deal closed. Everything still to be spent on turbines, foundations, cables and vessels after that date is shared too, and Stonepeak's half of that future spending is part of what it bought into.
That is why the up-front figure moved. It was set as a share of costs incurred through closing, so it fell from $3 billion to $2.6 billion as the timing and the spend to date shifted. A buyer of a project still under construction is really buying a share of a budget. Enerdatics therefore builds its enterprise value from the full budget rather than the closing payment: half of $9.8 billion, plus the withheld $145 million. On the full 2.6 GW, that is $1.94 million per MW. Grossed up to 100 percent of the project, it implies $3.88 million per MW, which is close to the all-in cost of building the wind farm.
What does the $145 million withholding actually do?
It turns cost discipline into a payment. The withholding is money Dominion would otherwise have received at closing, held back against how the build turns out. If final construction cost lands at or below the $9.8 billion budget, excluding financing, Dominion receives $100 million of it. If cost goes above $11.3 billion, Dominion receives nothing.
Enerdatics reads the withholding as the real developer premium in this deal, meaning the payment for the decade of development work Dominion put in after it began developing CVOW in 2013. That reading is an Enerdatics assessment rather than a stated term. It fits the structure, though: Stonepeak reimburses costs at par and pays extra only if Dominion delivers the project on budget. The premium is contingent on execution rather than paid for the permit.
How do the partners split a cost overrun?
In three bands. Up to $11.3 billion of total cost, excluding financing, the partners keep contributing equally. That gives 50/50 cost sharing up to 15 percent, or nearly $1.5 billion, above the current $9.8 billion budget, and up to 20 percent, or nearly $2 billion, above the $9.45 billion pre-contingency budget.
Between $11.3 billion and $13.7 billion the burden shifts. Stonepeak has the option, not the obligation, to put in more capital. If it does, Dominion covers between 67 and 83 percent of the surplus and Stonepeak the rest. If it does not, Dominion funds the gap and its ownership in the partnership rises in proportion, on a tiered unit price set out in the agreement. In practice Stonepeak has capped its exposure while keeping the right to defend its stake, and Dominion carries most of the tail risk on a project it still offtakes and still half owns.
The economics on the revenue side are fixed. Dominion buys the output for 20 years at $93.1 per MWh. In November 2023 it filed an adjustment with the State Corporation Commission lowering its levelised cost estimate for CVOW from $80 to $90 per MWh to $77 per MWh. The overrun bands exist because the price received will not move if the build cost does.
Enerdatics' data shows 24 US offshore wind M&A and partnership records between 2022 and 2025, of which nine carry a disclosed value. Grossed up to 100 percent, the lease-stage transfers cluster tightly: Ocean Winds paid $360 million for half of the 2.4 GW SouthCoast Wind project, about $0.30 million per MW; BP's $400 million for half of the 2,590 MW Beacon Wind project works out at $0.31 million per MW; Orsted's $152 million for half of the 924 MW Sunrise Wind project at $0.33 million per MW; and Corio and LS Power's $420 million for 44 percent of the 2,742 MW Attentive Energy project at $0.35 million per MW. The only other project already in construction, Global Infrastructure Partners' $1,426 million for half of Revolution and South Fork, grosses up to $3.41 million per MW. CVOW, at $3.88 million per MW, sits in the construction bracket rather than the lease bracket, more than ten times the lease-stage prints.
What does the deal signal for US offshore wind?
That capital was still available for US offshore wind in early 2024, but only on terms that put construction risk back on the developer. The same quarter saw the other big developers consolidating rather than selling: Orsted took full ownership of Sunrise Wind, and Equinor and BP split their New York partnership so that each walked away with one project. Lease-stage stakes changed hands at a fraction of a million dollars per MW because nobody could yet price what building them would cost.
CVOW was different because it had a regulated buyer for its power, a fixed 20-year price, a near-final budget and its own installation vessel, the Charybdis, under construction. That made it financeable by an infrastructure fund. Even then, Stonepeak paid at cost, made the premium depend on delivery and wrote itself an exit from the worst overrun band. Expect that template, reimbursement at par plus a contingent premium and a ceiling on shared overruns, to recur wherever a developer needs to recycle capital out of a project it is still building.
Frequently asked questions
How much did Stonepeak pay for its stake in Coastal Virginia Offshore Wind? Dominion received $2.6 billion at closing on 22 October 2024, down from the $3 billion initially agreed. Enerdatics values the transaction at $5,045 million once Stonepeak's share of remaining construction costs and the $145 million withholding are included.
Who buys the power from CVOW? Dominion Energy offtakes the output for 20 years at $93.1 per MWh. The project is expected to be operational in 2027 and to generate enough electricity for about 660,000 homes.
Who advised on the CVOW stake sale? Greenhill & Co and Santander US Capital Markets were financial advisors and Vinson & Elkins legal advisor to Stonepeak. Citi and Goldman Sachs advised Dominion Energy, with McGuireWoods and Morgan Lewis as legal advisors.
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