Tariffs could add $500M to Dominion offshore wind project

Richmond-based Fortune 500 utility Dominion Energy says the cost of its $10.8 billion Coastal Virginia Offshore Wind (CVOW) project in Virginia Beach could rise by about $500 million due to tariffs on imported goods from President Donald Trump‘s trade war.

During an earnings call last week, Dominion Chair, President and CEO Bob Blue provided an update on the construction of the wind farm, which when completed in 2026, will consist of 176 wind turbines 27 miles off the coast of Virginia Beach. CVOW will generate up to 9.5 million megawatt-hours per year of energy, enough to power up to 660,000 homes, Dominion has said.

Looming over the project has been the Trump administration‘s recent tariffs — including 25% tariffs on steel and 25% tariffs on goods from Mexico and Canada.

“It’s difficult to fully assess the impact tariffs may have to the project’s final cost, as actual costs incurred are dependent upon the tariff requirements and rates, if any, at the time of delivery of the specific component,” Blue said.

Blue said through the end of the first quarter, the project incurred actual tariff costs of $4 million. If  current U.S. tariff policies continue through the end of the second quarter, Blue said, that number would increase to about $120 million. And if the Trump administration’s tariff policies continue through the end of 2026, when the wind farm is expected to be fully operational, it’s estimated that the cumulative tariff impact would grow to $500 million.

Last week, Blue said, Dominion made its quarterly offshore wind construction update filing with the Virginia State Corporation Commission, notifying the SCC that the total CVOW project cost has increased by about $120 million to align with projected tariff costs through the end of the second quarter. The total updated development cost of CVOW is now $10.8 billion, and to accommodate the increase, Dominion plans to increase residential customers’ bills by an average of 4 cents through the life of the project.

The update marks the second time this year Dominion has increased the cost estimates for the project. In February, Dominion announced the project’s cost had jumped 9%, from $9.8 billion to $10.7 billion. The price increase is due to higher onshore electrical connection costs and network upgrades assigned by regional electric grid operator PJM. That price increase resulted in customer bills rising by an average of 43 cents per month. Blue said excluding tariff impacts, the cost for project components, excluding tariff impacts, have remained in line with the prior update.

“Let me be clear, CVOW remains one of the most affordable sources of energy for our customers,” Blue said.

Blue said the wind farm is 55% complete and remains on track to deliver energy to customers in 2026. More than 80% of the project’s 176 monopiles have been completed and successfully delivered to Virginia, he added. with deliveries of the final 32 monopiles expected over coming weeks. CVOW’s first offshore substation was installed on March 10, Blue said, with the remaining two offshore substations on track to be delivered this summer and installed in the fall.

While tariffs are expected to increase the project’s cost, Blue doesn’t anticipate tariffs impacting the company’s ability to get the materials needed to complete the project.