Dominion Energy is set to begin offshore construction of the $9.8 billion Coastal Virginia Offshore Wind (CVOW) farm in second-quarter 2024, having secured final federal approvals for the project.

The U.S. Bureau of Ocean Energy Management gave its final approval to the project’s construction and operations plan, Dominion said Jan. 30. The U.S. Army Corps of Engineers also issued a permit to allow for permitted impacts to U.S. waters, including the electric transmission line connecting energy generated offshore to the onshore electric grid.

Consisting of 176 turbines and three offshore substations on a nearly 113,000-acre lease area off Virginia Beach, the 2.6-gigawatt (GW) CVOW is the largest offshore wind project being developed in the U.S. When complete, the project is expected to provide enough power for about 660,000 homes. Developers expect to complete the project in 2026.

“Virginia is leading the way for offshore wind as we near the start of offshore construction for Coastal Virginia Offshore Wind,” said Dominion Energy’s CEO Bob Blue. “These regulatory approvals keep CVOW on time and on budget as we focus on our mission of providing customers with reliable, affordable and increasingly clean energy.”

The approvals came amid continued efforts to reach the Biden administration’s offshore wind capacity target of 30 GW by 2030.

American Clean Power Association’s Vice President for Offshore Wind Anne Reynolds called the approval a milestone toward America’s energy security and clean energy future.

“This project demonstrates what offshore wind development can deliver onshore by attracting new investments in communities, building domestic supply chains, and revitalizing domestic ports,” Reynolds said in a statement. “Additionally, CVOW will enhance the resilience and reliability of Virginia’s electric grid, ensuring a more secure and stable energy supply for residents and businesses while also improving local air quality.”

Other approved commercial-scale offshore wind farms include Vineyard Wind 1, South Fork Wind, Ocean Wind 1 and Revolution Wind.

Despite the approvals, challenging macroeconomic conditions such as inflation, supply chain difficulties and interest rates have caused developers to rethink original plans. Several developers canceled contracts and halted developments as they pursued better prices and rebid projects.

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Dominion Energy’s project is currently on track and on budget, the company said.

In November, Dominion said it was in the advanced stages of a process to find an equity partner for CVOW. Speaking during the company’s third-quarter 2023 earnings call, Blue said 92% of the project’s costs—excluding contingency of about $370 million—are fixed. At the time, unfixed costs amounted to about $750 million, including onshore electrical work, fuel for transport and installation, plus certain project oversight costs.

Dominion Energy is scheduled to release its fourth-quarter results Feb. 22.

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