Avangrid sells Kitty Hawk North offshore wind lease to Dominion Energy for $160m

In a strategic move aimed at bolstering its long-term renewable energy goals, Avangrid, Inc. (NYSE: AGR) has announced the sale of its Kitty Hawk North offshore wind lease area and associated assets to Dominion Energy. The deal is valued at approximately $160 million, reflecting a significant lease acquisition payment of $117 million alongside costs for associated development reimbursement.

According to Avangrid CEO Pedro Azagra, this transaction is not merely a transfer of assets but a strategic enhancement to Avangrid’s renewable energy portfolio. “This sale provides a substantial capital infusion that will support the continued construction of our nation-leading Vineyard Wind 1 project and further development of our diverse portfolio of renewable projects,” Azagra stated. This strategic shift allows Avangrid to focus on developing the Kitty Hawk South area, aiming to produce up to 2.4 Gigawatts of power, potentially servicing states like North Carolina and Virginia.

On the flip side, Virginia Electric and Power Company, a wholly owned subsidiary of Dominion Energy, Inc. (NYSE: D), looks to develop the acquired lease into what will be known as CVOW-South. This project is poised to add 800 MW of capacity, enough to power approximately 200,000 homes and businesses. “With this acquisition, we secure additional resources to meet the expected doubling of electric demand in our Virginia territory over the next 13 years,” remarked Robert M. Blue, CEO of Dominion Energy.

Both companies are not just focusing on energy production but are also engaging with local communities to address concerns and ensure the successful integration of these projects into local environments. Dominion Energy, in particular, emphasizes its commitment to working with communities, highlighting its ongoing development of the Coastal Virginia Offshore Wind project, which continues to progress on time and within budget.

The deal between Avangrid and Dominion Energy signifies a major step forward in the U.S.’s commitment to expanding renewable energy capacity. As these companies advance their respective projects, the focus remains on not only enhancing energy production but also ensuring that these developments are sustainable and beneficial to the communities involved.

The strategic realignment by Avangrid could be seen as a savvy move to maximize its resource allocation and focus on larger-scale projects that promise higher outputs. Meanwhile, Dominion Energy’s acquisition reflects a calculated expansion into renewable energy that aligns with its long-term sustainability goals and regulatory environment.

This transaction highlights the dynamic nature of the renewable energy market and underscores the importance of strategic partnerships and investments in achieving a sustainable energy future.