US energy services company Avangrid has reached an agreement to sell its Kitty Hawk North offshore wind lease to Dominion Energy's subsidiary Virginia Electric and Power Company for $160m. Kitty Hawk North is located offshore North Carolina.

The transaction includes the lease area of 40,000 acres, and associated assets.

The lease, to be known as CVOW-South, will support 800MW offshore wind generation capacity by the 2030s.

It will power 200,000 homes and businesses and will be integrated into the company's existing transmission grid.

The $160m transaction value comprises a $117m lease acquisition cost and a $43m reimbursement for associated development costs to Avangrid.

The deal will be finalised in the fourth quarter of 2024.

Avangrid retains ownership of Kitty Hawk South and will continue developing the area, which could deliver 2.4GW of power to states or private entities.

The Virginia Electric and Power Company is advancing its 2.6GW Coastal Virginia Offshore Wind (CVOW) project, 25 miles north of the newly acquired CVOW-South lease. CVOW is progressing on schedule and within budget, with operations expected to commence by the end of 2026.

Since installation began on 22 May 2024, 25 monopiles have been successfully installed.

This marks a significant milestone towards the company's goal of installing between 70 and 100 monopiles during the initial installation season, which concludes at the end of October.

Avangrid CEO Pedro Azagra stated: “As Avangrid continues the construction of our nation-leading Vineyard Wind 1 project and the development of our diverse portfolio of offshore and onshore renewable projects, this transaction advances our strategic priorities by providing significant capital infusion for reinvestment.

“Executing this agreement allows us to move forward with our long-term plans for the development of Kitty Hawk South, further demonstrating our commitment to accelerating the clean energy transition in the US."