Dominion Energy closes $2.6bn sale of 50% stake in Coastal Virginia Offshore Wind project to Stonepeak

Dominion Energy has finalised a significant transaction, closing the sale of a 50% non-controlling interest in its Coastal Virginia Offshore Wind (CVOW) commercial project to Stonepeak. This landmark deal, worth approximately $2.6 billion, comes as part of Dominion’s broader strategic efforts to restructure its portfolio and reduce debt. Stonepeak’s investment reflects a growing trend among major infrastructure investors seeking exposure to renewable energy ventures in the United States.

The CVOW project, the largest of its kind currently under development in the U.S., has the capacity to produce 2.6 gigawatts of renewable energy. Situated off the coast of Virginia Beach, the project covers a vast 113,000-acre lease area and includes 176 turbines alongside three offshore substations. Upon completion, expected in late 2026, the project aims to power up to 660,000 homes, advancing Dominion’s commitment to renewable energy and supporting Virginia’s energy goals.

At the closing of the sale, Dominion Energy received $2.6 billion, which effectively reimbursed 50% of the capital expenditure incurred to date. Stonepeak will also finance 50% of the remaining construction costs under conditions agreed upon in the partnership. This investment is a strategic move for both companies: Dominion retains full operational control over the construction and management of the CVOW project, while Stonepeak secures minority rights, giving it influence without direct management responsibilities.

Stonepeak’s Strategic Investment in Renewables

Stonepeak’s involvement in the CVOW project aligns with its focus on infrastructure investments, particularly in the renewable energy sector. The company has built a global portfolio of such assets, making the Dominion Energy partnership a natural extension of its business model. Stonepeak’s Senior Managing Director, Rob Kupchak, highlighted the project’s alignment with Stonepeak’s core investment strategy, noting the potential of CVOW to become one of the most impactful energy developments in the United States.

Dominion’s Strategic Portfolio Adjustment

Dominion Energy’s latest sale marks the culmination of its comprehensive business review aimed at debt reduction. Since 2022, the company has completed numerous transactions, including the divestment of Cove Point LNG and other gas assets, effectively reducing its debt by over $21 billion. The CVOW partnership with Stonepeak represents a pivotal point in Dominion’s shift towards renewable energy projects, providing the financial resources necessary to continue its construction on schedule while maintaining operational oversight.

According to Dominion’s CEO, Robert M. Blue, the collaboration with Stonepeak is crucial for maintaining the momentum of the CVOW project, which remains on budget and on schedule. Blue emphasized that Stonepeak’s involvement would ensure financial stability, enabling Dominion to proceed with its ambitious timeline and delivery of renewable energy to the Virginia market.

Market Impact and Share Price Analysis

Following the announcement of the sale’s closure, Dominion Energy’s stock showed a modest uptick, reflecting investor confidence in the company’s strategic direction. Market analysts noted that the capital injection from Stonepeak is a positive development, particularly given Dominion’s ongoing shift towards clean energy and debt reduction. The market response indicates optimism about Dominion’s long-term growth prospects as it pivots more decisively into renewable energy.

Stonepeak’s investment also underscores the increasing interest among infrastructure investors in renewable energy projects in the United States. Analysts see this partnership as a major vote of confidence in the future of offshore wind power and its role in the energy transition.