US Offshore Wind Project Faces $443 Million Mid-Construction Cost Surge Due to Tariffs
Dominion Energy has announced a significant increase in the estimated costs for the Coastal Virginia Offshore Wind (CVOW) project. Affected by new tariffs, total capital costs for the 2.6 GW offshore wind farm have surged to approximately USD 11.2 billion (EUR 9.7 billion). This represents an increase from the previous estimate of about USD 10.9 billion (EUR 9.5 billion).
Impact of Tariffs on Offshore Wind Costs
The cost surge stems from newly imposed federal tariffs on imported materials and components essential for project construction. The latest quarterly results, published on 31 October 2025, indicate that the increase includes an estimated USD 443 million (EUR 385 million) attributable to these tariffs. The tariffs were implemented in 2025 and specifically impact materials and equipment sourced internationally.
Details of Imposed Tariffs
- 30% tariff on imports from Mexico
- 35% tariff on imports from Canada
- 50% tariff on steel material value
- 15% general tariff on goods from the European Union and other countries
Notably, Dominion Energy clarified that no stacking of tariffs applies to steel-related imports.
Financial Implications for Consumers
As a result of the increased project costs, consumers could see an estimated rise of USD 0.63 (EUR 0.55) in their bills. However, Dominion assured that the revised cost is still within the approved prudency threshold and that consumer protections under Virginia’s regulatory framework are intact.
Cost Sharing Structure
Under current cost-sharing agreements, Dominion estimates its exposure to tariff costs could range from USD 35 million (EUR 30 million) to USD 218 million (EUR 189 million). This variance depends on the application of tariffs and the reimbursement processes allowed by regulatory frameworks.
Dominion Energy co-owns the CVOW project with Stonepeak, which acquired a 50% non-controlling interest last year. Despite the financial challenges posed by tariffs, the project remains on schedule.
Project Update and Future Developments
As of now, construction of the CVOW project is approximately 66% complete. Dominion Energy is aiming for the first power generation to commence in the first quarter of 2026, with full commercial operations slated for the end of that year. The offshore wind farm is located 43 kilometers (27 miles) off the coast of Virginia Beach, featuring 176 wind turbines.
