Tariffs Raise US Offshore Wind Project Costs by $443 Million Mid-Build

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Tariffs Raise US Offshore Wind Project Costs by $443 Million Mid-Build

Dominion Energy has reported updated costs for its Coastal Virginia Offshore Wind (CVOW) project due to newly imposed U.S. tariffs. In its Q3 2025 results, released on October 31, the company estimates the total capital cost for the 2.6 GW offshore wind farm to be around USD 11.2 billion (approximately EUR 9.7 billion).

Impact of Tariffs on Project Costs

This figure reflects an increase from the previous estimate of approximately USD 10.9 billion (around EUR 9.5 billion). The rise in costs has been attributed to federal tariffs on imported materials and components essential for construction.

New federal tariffs include:

30% tariff on imports from Mexico
35% tariff on imports from Canada
50% tariff on the value of steel materials
15% general tariff on goods from the European Union and other countries

The latest cost estimates include approximately USD 443 million (about EUR 385 million) resulting from these tariffs. This follows an earlier project cost increase of about 9% reported earlier this year.

Consumer Bill Implications

The anticipated impact on consumer bills is estimated at an additional USD 0.63 (EUR 0.55). However, Dominion assures that the adjusted project cost remains within acceptable regulatory thresholds and that consumer protections are upheld under Virginia’s regulatory framework.

Cost-Sharing and Financial Exposure

Dominion Energy indicates that its financial exposure to the tariff costs may range from USD 35 million (approximately EUR 30 million) to USD 218 million (around EUR 189 million). This range depends on tariff application and reimbursement through regulatory mechanisms.

Any remaining costs will be shared with project partners. Dominion, alongside its partner Stonepeak, which holds a 50% non-controlling interest in the CVOW, continues to manage the financial implications of the tariff adjustments.

Project Timeline and Status

Despite the challenges posed by tariffs, Dominion states that the CVOW project is on schedule. Construction has reached approximately 66% completion, with the goal of first power generation set for the first quarter of 2026. Full commercial operation is targeted for the end of that year.

The Coastal Virginia Offshore Wind project is strategically located 43 kilometers (27 miles) off Virginia Beach and will consist of a total of 176 wind turbines. The project is poised to become the largest offshore wind farm in the United States, marking a significant step in renewable energy development.