Eversource Starts Exiting US Offshore Wind Projects It Owns with Ørsted

Business & Finance

May 26, 2023, by Adrijana Buljan

Ørsted and Eversource Energy have signed an agreement under which Ørsted will acquire 50 per cent interest in the uncontracted offshore wind lease area in the US the two companies currently own together. Eversource is also looking at selling its 50 per cent stake in the three jointly owned contracted offshore wind projects: South Fork Wind, Revolution Wind and Sunrise Wind.

The agreement, worth USD 625 million, will see Ørsted becoming the full owner of the Lease Area OCS-A 500 (Lease 500), which contains approximately 187,000 uncontracted acres of seabed and has a potential capacity of up to 4 GW.

The developer will also be the sole bidder in the ongoing New York and Rhode Island offshore wind solicitations.

The signing of the agreement follows Eversource’s announcement from last year, when the US company said it had initiated a strategic review of its offshore wind investment portfolio that involves its 50 per cent interest in its offshore wind joint venture with Ørsted.

Eversource said in 2022 it would use the proceeds from the transaction to support its regulated investments in strengthening, modernising and decarbonising its regulated energy and water delivery systems.

The uncontracted offshore wind area includes the rights for the area located 40 kilometres off the Massachusetts South Coast that has not been allocated to a specific project.

Along with the seabed lease rights, Ørsted will also take full ownership of partnerships with the Port of Providence, the Port of Davisville, and Quonset Point, all in Rhode Island, and with Connecticut’s New London State Pier.

Ørsted will also become the sole owner of the operations and maintenance hub in East Setauket, N.Y., and the charter agreement for the first American-built offshore wind service operations vessel, which is under construction at Edison Chouest’s facility in Houma, Louisiana.

David Hardy, Group EVP and CEO Americas at Ørsted, said: “This acquisition further demonstrates our long-term commitment to building an American offshore wind energy industry and the value creation opportunities we see in the U.S. market. In addition to taking full ownership of seabed that is familiar to our team after years of work in this area, we will also be the sole bidder in our New York 3 and Rhode Island 2 active offshore wind solicitations. The combination of the seabed and additional components in this agreement further establish a major hub in the Northeast for our activities and future opportunities”.

As for the 50 per cent interest in the three contracted offshore wind projects (South Fork Wind, Revolution Wind and Sunrise Wind), as part of the agreement with Ørsted, Eversource will provide tax equity for the South Fork Wind project, which Ørsted says is a critical milestone for South Fork Wind ahead of its plan to begin operations and delivering renewable energy later this year.

Eversource will continue to support onshore scopes of all three projects through construction, ensuring the long-term continuity and success of the portfolio, Ørsted said.

The developer noted that the agreement was subject to customary closing conditions and regulatory review and is expected to close in the third quarter of 2023.