Dominion Hides Huge Offshore Wind Cost Risk


By David Wojick 

The offshore wind industry is suffering a runaway cost crisis, but Dominion Energy says the cost of its monster project will not go up. Apparently, there is not even a risk of it going up. This preposterous claim is worth exploring.

On the crisis side, I recently wrote about it in general terms. See my

The financial magazine “Barrons” has done some work on this crisis situation. Here is a telling quote from a recent article:

“But behind the scenes, the news about wind power is more sobering. Financially, the industry is teetering, with a parade of companies planning to renegotiate or pull out of contracts, jeopardizing plans for projects that were expected to provide electricity for millions of homes. Inflation is erasing profits, causing some of the largest energy firms in the world to back away. “Returns on offshore wind are becoming more and more challenged,” Shell CEO Wael Sawan told Barron’s last month, just days after a Shell joint venture said it would pull out of a power contract in Massachusetts. Shell won’t build renewable projects that can’t earn initial returns of 6% to 8%, he said.

At least eight multinational companies in three states have quietly started to back out of wind contracts or ask to renegotiate deals in ways that will pass more costs to consumers. Beyond Shell (ticker: SHEL), they include BP (BP), Denmark’s Orsted(DNNGY), Norway’s Equinor (EQNR), Spain’s Iberdrola (IBDRY), Portugal’s Energias de Portugal (EDPFY), and France’s Engie (ENGIY) and state-owned Electricite de France. The projects those companies are building will collectively cost tens of billions of dollars to construct and connect to the grid. The cost problems they’re facing make offshore wind a dicey investment proposition today, with the potential for substantial write-downs ahead.”

“Financially, the industry is teetering” has an ominous ring to it. This is truly serious for the companies involved in offshore wind, especially the developers.

Dominion Energy is developing one of the biggest American offshore wind projects, a 2,600 MW monster. It will lie out from Norfolk Naval Base (the world’s largest), and Virginia Beach, the state’s biggest city.

Dominion has estimated the project cost at just under $10 billion. One would expect the cost crisis to increase substantially. In fact, the cost increase typically cited by other industry players is a whopping 40%.

But in Dominion’s latest 6-month status report, submitted just this May, they amazingly predict no cost increase at all. This astounding prediction is then repeated in a July submission (or basically right now), which incorporates the May report by reference.

There is no public discussion of risk in the May status submission. There may be some admission of risk, but most of that submission is kept secret.

Here is how veteran Dominion watcher Steve Haner reported this strange secrecy in the great Virginia-focused blog called “Bacon’s Rebellion”:

“Dominion Energy Virginia’s first wave of offshore wind remains on schedule, and within the announced capital cost of $9.8 billion; and the cost per unit of the energy from the turbines will be lower than initially projected, the utility reported last week.”

“Details? Well, many of those are secrets. Much of the brief report the utility filed with State Corporation Commission remains redacted, with large blocks covered by black ink. The redacted data involves reports from an affiliate corporation, Blue Ocean Energy Marine LLC. There apparently is also another document ‘filed under seal under separate cover.’

“Finally, Dominion refers to an Excel file that includes all the data on the new levelized cost of energy (LCOE) calculations which was posted to a shared eRoom. The password is available only to the SCC and case parties who signed non-disclosure agreements, reports the SCC’s communications director in response to a query about access for Bacon’s Rebellion.”

Potential cost overruns are a sensitive topic for this monster project because there are rules over who will pay for them. Any increase taking the cost up to $10.3 billion is split 50-50 between Dominion and their customers. But beyond and up to $13.7 billion, Dominion pays it all. Beyond that, who pays what will be up to the SCC.

By an amazing coincidence, $13.7 billion is a 40% increase in cost, which now looks entirely possible. If that happened, Dominion would be on the hook for almost $4 billion, a big risk indeed.

I can find no public disclosure of this risk to the public, to investors, or to the Virginia or Federal Authorities that oversee this monster project.

Even if Dominion already has fixed-price future contracts for all the construction and equipment, the risk is still there. As Barrons says: “Financially, the industry is teetering, with a parade of companies planning to renegotiate or pull out of contracts, jeopardizing plans for projects…”

Under these dire circumstances, all long-term, big-dollar contracts are risky. Companies go bankrupt or renege to keep from going bankrupt. Contracts rendered ruinous by cost increases will simply not be met.

I understand this kind of big-dollar risk must be publicly disclosed to stockholders and potential investors. Maybe the SEC should be looking at Dominion’s handling of this huge risk. So should Virginia.


David Wojick

David Wojick, Ph.D. is an independent analyst working at the intersection of science, technology and policy. For origins see For over 100 prior articles for CFACT see Available for confidential research and consulting.

For more on the problems with Wind Power, go to WUWT’s ClimateTV page.

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Coeur de Lion
July 31, 2023 11:48 pm

Is there any consideration about windmill longevity?

Joseph Zorzin
Reply to  Coeur de Lion
August 1, 2023 4:04 am

Especially those at sea- as in the image at the top of this thread. The sea can rip down coastal cliffs- they can rip down wind turbines.

Reply to  Joseph Zorzin
August 1, 2023 6:22 am

Turbine longevity is the bigger question these days with admissions of premature failures.

Reply to  Coeur de Lion
August 1, 2023 9:02 am

Which begs the question “Why is Dominion Energy Building these “at sea wind destruction facilities” within the normal path of the Atlantic Hurricanes?

August 1, 2023 12:47 am

Its had the wind knocked out of it

“”By announcing hundreds of new oil and gas licences, the prime minister, Rishi Sunak, has become a “dangerous radical” pursuing “moral and economic madness”.

That is not the judgment of Just Stop Oil, or any other environmental campaign group, but the United Nations secretary general, António Guterres.””

It’s silly season.

Peta of Newark
Reply to  strativarius
August 1, 2023 1:28 am

Chris Packham is after Rishi also – informing the world that he (Packham) is ‘sad’
Was there ever a truer word?

I had to show the screenshot – see the relative Upvotes and Downvotes he’s getting

I did wonder who this ‘Dominion‘ outfit actually is…
(Anything to do with shonky voting machines by any chance?)

No matter voting, it’s that only Governments ever come out with lines of craic like that.

Chris Packham is Sad.PNG
Reply to  Peta of Newark
August 1, 2023 1:53 am

Their heir to Attenborough, just as Malthusian and unhinged

A very nasty piece of work

John Hultquist
Reply to  Peta of Newark
August 1, 2023 8:33 am

 Dominion Energy, Inc., commonly referred to as Dominion, is an American power and energy company headquartered in Richmond, Virginia
From: Dominion Resources (1983–2017)
And before that: Virginia Electric and Power Company (VEPCO) (1925–1983)

Dominion Voting Systems Corporation is a company that produces and sells electronic voting hardware and software, including voting machines and tabulators. in Canada and the United States. The company’s headquarters are in Toronto and Denver. Founded in 2002.

[sourced from Wikipedia]

Reply to  Peta of Newark
August 1, 2023 2:50 pm

Packham has nothing of interest, or competence to add – he should stick to twigs and leaves

Reply to  Peta of Newark
August 3, 2023 7:56 am

Anything to do with shonky voting machines by any chance?”

Dominion Energy is an electric power generating Utility for America’s Mid-Atlantic area.
Dominion Power has zero relevance to Dominion Voting Systems.

Reply to  strativarius
August 1, 2023 3:52 am

Every day is silly season in the Guardian with their unhinged writers. Their ignorance knows no depths.

Dave Fair
Reply to  gezza1298
August 1, 2023 11:23 am

They are not ignorant. They reflect Marxist social and economic theories.

Joseph Zorzin
Reply to  strativarius
August 1, 2023 4:05 am

He’s boiling mad. 🙂

Reply to  strativarius
August 1, 2023 12:05 pm

So, Guterres is now boiling Sunak! [Popcorn time]

August 1, 2023 1:15 am


A UNESCO report has recommended the Great Barrier Reef not be placed on a list of world heritage sites “in danger”. August 1st 2023.

August 1, 2023 2:23 am

One for the health lobby

“”A vegan raw food influencer who lived on an ‘extreme’ diet of exotic fruit has reportedly died from starvation and exhaustion.””

Reply to  strativarius
August 1, 2023 7:00 am

Yet another candidate for a Darwin Award.

What the Hell is wrong with these people?

Joao Martins
Reply to  Graemethecat
August 4, 2023 6:15 am

The brains.

August 1, 2023 3:20 am

Dominion Energy is a publicly traded company listed on the NYSE. If government regulators aren’t doing anything about this apparent dishonesty and bad management then maybe delisting by the NYSE could follow. You know … markets and all that stuff.

One solution often proposed is, “The government will bail them out.” because “They’re too big to fail.”

More likely it will be a case of, “If this can’t go on forever, it probably won’t.” A run on the stock could push things along.

Reply to  rovingbroker
August 1, 2023 6:20 am

Dominion has many DEMOCRAT investors, which will have the government bail out Dominium with federal guaranteed loans at low interest.

Reply to  wilpost
August 1, 2023 8:22 am

That means banks get repaid, investors get bailed out, Dominium walks, a la Hunter Biden, and the US people get screwed with a bigger national debt.

The whole world is laughing, while continental European Big Wind is cleaning our clocks.

What me worry?

Dave Fair
Reply to  wilpost
August 1, 2023 11:25 am

Like you, I’m changing my name to Alfred E. Newman.

Reply to  wilpost
August 1, 2023 6:12 pm

Banks get repaid, Dominion lives on, Dominion execs get huge bonuses, but investors get screwed. I owned D stock and bailed when Covid closed manufacturers, reduced Dominion’s revenues, and they slashed their dividend. I was one of the first to bail and lost nothing. I moved my investment to AEP. AEP invested heavily in a NON-REGULATED company making investments in wind and solar. When I realized how deeply invested they were in that project I bailed, again losing nothing. They sold off those investments for about a billion dollar loss, sending the stock down over 10%. I am now invested in Duke.

These companies are not for the feint of heart and investors need to stay on top of what they are doing, because there is no protection for investors.

My coal, oil, and gas stocks are doing just fine, thank you. Senile Joe restricted the supply of those commodities, sending prices up.

Tom Abbott
August 1, 2023 4:29 am

From the article: “Financially, the industry is teetering,”

The chickens are coming home to roost. Reality is starting to dawn.

And take away the taxpayer subsidies, and all of the “renewable” projects would go out of business or never get started. They are being artifically kept afloat on the backs of the poor taxpayers.

Free Enterprise in the energy sector is what is called for. No taxpayer subsidies. Of course, that means no windmills or industrial solar since they are not financially viable without taxpayer subsidies.

August 1, 2023 5:55 am

The UK fourth auction in 2022 had accepted bids for 7000 MW, of which Vattenfall represented 3 projects totaling 4200 MW.

Vattenfall has put it’s commitment of the 4200 MW “on hold”, because it’s spreadsheets show a 40% increase is needed in c/kWh to make the projects financially viable by Vattenfall standards.

Energy Giant Vattenfall Puts Gigantic Offshore Wind Project on Ice, “Threatening UK Climate Targets”
Energy Giant Vattenfall Puts Gigantic Offshore Wind Project On Ice, “Threatening UK Climate Targets”

The UK bureaucracy is maintaining its stiff upper lip, so far, but the s..t will hit the fan.


It doesnot add up
Reply to  wilpost
August 2, 2023 7:59 am

The AR4 results can be found here

Vattenfall was awarded 1.4GW. The rest of the project was planned for inclusion in later rounds. Because they withdrew, they are not allowed to bid for the next round. Their lawyers will argue that next round means AR5, which I doubt they would have bid for anyway. The government is now well behind the pace on new renewables capacity vs aspiration. I suspect quite a number of other AR4 projects will fall by the wayside – awaiting grid connection if nothing else.

August 1, 2023 6:17 am



Europe Lacks Physical Infrastructure to Build 8,000 MW of Offshore Wind per Year

The EU wind industry has told the EU in Brussels: “We simply don’t have enough factories and infrastructure to build and install the volumes Europe (and the US) wants”

Wind Europe CEO, Giles Dickson, in a Press release, dd. 16 March 2023, ‘EU Green Industry Plan falls short for now’
Plus, the UK 26,000 MW build-out would be at about 25% higher turnkey cost per MW, and would produce much more expensive electricity, c/kWh, than the existing 14,000 MW of offshore wind turbines
Biden wants to build 30,000 MW offshore wind turbines by 2030, that thus far has been killing dozens of whales on the US East Coast, before even a single 850-ft-tall wind turbine has been erected!

If the European companies do not have the capacity to build the 26,000 MW UK offshore wind, how would they ever be able to also build, at the same time, the 30,000 MW Biden offshore wind?

How in hell do these demented politicians and bureaucrats get into these jobs?
Why do their fanciful ideas get magnified by the government-subsidized media mouthpieces?

August 1, 2023 6:20 am

In the new compromised world of regulated utilities, the consumer is the target of any cost “miscalculations” by promoters. Add that to the list of all the other compromised institutions.

Tom Halla
August 1, 2023 7:08 am

The Democrats lost the governorship of Virginia, and is a serious risk of losing both houses of the legislature. Who, pray tell, does Dominion rely on to bail them out? The Feds?

Dave Fair
Reply to  Tom Halla
August 1, 2023 11:30 am

It doesn’t matter the political party when its OPM.

Nicholas McGinley
August 1, 2023 8:42 am

And let’s not forget this huge additional risk factor:
Siemens Energy’s shares tumble as wind turbine troubles deepen | Reuters

Does anyone think it is only this one company having these problems, or that this company has fully disclosed the scope of the problem?
They seem to be claiming that they are seeing failures in as much as 30% of their fleet of turbines, and it will cost 1 billion euros to fix!
This huge corporation did not lose 1/3 of it’s market value on account of 1 billion dollars.
I think the stock dropped an amount worth 6 to 7 billion in June alone.

It doesnot add up
Reply to  Nicholas McGinley
August 2, 2023 5:53 am

More from Siemens in the next few days when they announce their results. It will be a very interesting analysts call as they are already lined up to ask awkward questions.

Dave Andrews
August 1, 2023 9:55 am

The wind industry in Europe is also suffering. All five turbine manufacturers have been making losses for over 2 years, factories have closed in Germany, Spain and Denmark. 50,000 jobs had been lost in Germany alone by the end of 2021.

Meanwhile many projects are being delayed because grid connection is not available. Most countries in Europe are experiencing this problem – in the UK ,for example, National Grid is saying unreliables already in the pipeline will have to wait 10 – 15 years for connection to the Grid.

As regards offshore wind Vattenfall has recenlly pulled out of a large scheme in the UK North Sea saying it is not viable. Wind Europe notes there is a world wide shortage of the three types of ships required to build offshore wind farms and those ships that are available are already booked up for years.

Nontheless, the EC is wanting to double the yearly installation rate to deliver its targets for 2030!

Dave Fair
August 1, 2023 11:20 am

Dominion and its governmental regulators are committing fraud. Nobody will go to jail and the fat cats will get richer. As usual, taxpayers and ratepayers will be left on the hook.

August 1, 2023 2:46 pm

All renewable farm shills hide the true costs, if truth be known, none woukd ever get built

August 1, 2023 3:09 pm

Wind farms teetering on the edge of profitability, solar farms demanding an increase in subsidies, Ford losing $4.5million on EVs.

Looks like the scam is going to be costing tax payers a whole lot more soon.

It doesnot add up
Reply to  MarkW
August 2, 2023 5:55 am

Are EVs born Dear?

It doesnot add up
August 2, 2023 5:42 am

Keep your eyes on the UK. This week DESNZ will have been notified of the full list of pre-qualified potential bidders for the AR5 CFD auction, having used every device they can to procrastinate while they try to work out what to do. According to the timetable the Minister can decide to increase the auction pot money before formal bids are invited next week.

Auction pots are an arcane device. They work in 2012 money, with the pot being used up progressively by successful bids. When the pot runs out higher bids are discarded. Each technology has its own target price which has been set on a very ambitious basis and assumes that renewables are getting ever cheaper. The difference between the bid price and the target price multiplied by the assumed output based on assumed high capacity factors defines how much of the pot each bid uses up. There is a ceiling on bid prices, which is £44/MWh in 2012 money (£58.85/MWh today) for offshore wind.

Very little capacity will be procured if there are only bids at the ceiling price unless the pot is enlarged. Given the increase in cost there could be no bids at all for offshore wind, in which case there is no point increasing the pot. The auction will need to be re-run, with much improved terms. This is why DESNZ has been scurrying around trying to find other backdoor ways of doling out large subsidies (e.g. its so called non profit factors).

The decision by Vattenfall to cancel its Norfolk Boreas project was a major shot across the bows. As an AR4 windfarm it has the option not to commence the CFD when it was completed, and take market prices instead. Cancellation suggests they think it would not be competitive at market prices. Terms for AR5 have been toughened up, and do not permit the market price alternative.

The subsidies will need to be a lot higher. Better still, they need to reappraise the commitment to wind. The delays in capacity procurement are posing threats to supply, which will likely see emergency investment in CCGT that can be built rapidly at (coal) power station sites that are already well grid connected. Perhaps even diesel generators.

David Wojick
August 2, 2023 6:44 am
August 3, 2023 7:52 am

Dominion Energy is developing one of the biggest American offshore wind projects, a 2,600 MW monster. It will lie out from Norfolk Naval Base (the world’s largest), and Virginia Beach, the state’s biggest city.”

Sound like America’s navy and all of the international shipping to Chesapeake Bay and Potomac River ports, e.g., Baltimore will be channelized approaching, entering and exiting the Chesapeake Bay.
A serious siege/attack weakness.

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