Cost of US-built WTIV Charybdis Balloons to $715 Million

The cost to construct the United States' first domestically built wind turbine installation vessel (WTIV), Charybdis, has risen to $715 million, Dominion Energy revealed in its latest quarterly results, marking another snag for the fledgling U.S. offshore wind industry.

The first-of-its-kind vessel — the only WTIV being built in the U.S. to comply with the Jones Act — was originally slated to cost about $500 million when U.S. power company Dominion ordered it from Brownsville, Texas shipbuilder Seatrium AmFELS (then Keppel AmFELS) in 2020. Dominion will own the 472-foot Charybdis through its subsidiary Blue Ocean Energy Marine.

The updated $715 million price tag is up from Dominion's $625 million projected cost given last quarter, reflecting new modifications to accommodate project specific turbine loads based on final certified weights and dimensions of the equipment and additional financing costs, Dominion said in its most recent investors presentation. The modifications will enable Charybdis to handle the “latest technology turbine design”, according to Dominion, which did not reply to a request for comment.

Charybdis will have a maximum lifting capacity of 2,200 tonnes and be able to lift to heights of approximately 175 meters above sea level, while the largest international WTIVs currently under construction will be able to lift upwards of 3,000 tonnes and 220 meters.

The cost of US shipbuilding
The elevated cost of U.S.-built vessels is seen as a weight on America’s offshore wind industry, which is already grappling with a number of cost-related issues.

"In the context of the international WTIV segment, where South Korean and Chinese yards dominate the new building landscape, the Charybdis can be seen as expensive, costing approximately 50% more at time of new building contract than a similar specification vessel contracted in South Korea in the same period," said Philip Lewis, director of research at Intelatus Global Partners.

For comparison, Danish company Cadeler recently announce a contract to build a WTIV in South Korea for $400 million.

"Charybdis is a Jones Act compliant vessel, requiring construction in yards that are not used to recent industrialized production of WTIVs, despite vast experience in jack-up rig and lift boat building,” Lewis said. “On a like for like basis, Jones Act wind vessels cost more than their European- and Asian-built counterparts,” Lewis added, noting that U.S.-built service operations vessels (SOV) and crew transfer vessels (CTV) are also significantly more expensive than those being built overseas for operations in Europe.

In addition to cost overruns, the Charybdis build program is also facing significant delays, having blown past its original 2023 delivery target. The project, which was originally planned to run 36-48 months, will now be closer to 60-72 months once sea trials are completed, Lewis said.

The vessel is now 89% complete and on track for delivery in late 2024 or early 2025, Dominion said in its most recent presentation to investors, noting that the main crane structures and helideck structure have recently been installed while engine load testing has recently commenced and upper leg construction is continuing on track.

Charybdis was previously under contract to enter service out of New London, Conn. to support construction at the 704-megawatt (MW) Revolution Wind project off the coast of Rhode Island and 924-MW Sunrise Wind farm off the coast of New York, but developer Ørsted announced in May that it canceled the charter agreement.

Instead, Charybdis’ first job will be to install the turbines on Dominion’s 2.6-gigawatt (GW) Coastal Virginia Offshore Wind (CVOW) project in federal waters off Virginia Beach, Va. Lewis noted that Siemens Gamesa has indicated that turbine installation will commence in May 2025, which appears to be in line with the current reported project status by Dominion, which envisages project commissioning by the end of 2026.

Advantages of a Jones-Act-qualified WTIV
To date, all offshore wind foundation and turbine installs in the United States have been performed using foreign installation vessels supported by U.S. tugs and barges for feedering. Notably, because Charybdis is Jones-Act-qualified, it will be able to install these components without tug and barge feeder spreads, potentially leading to productivity gains.

"Feeder vessels are more prone to weather disruptions and increase the handling (and exposure to damage) of delicate components," Lewis said.

U.S.-flag WTIVs also free developers in the U.S. from having to rely on European and Asian installation vessels, which are already in high demand and relatively short supply globally—a problem that is only expected to intensify in the years ahead.