Shell Exits US Offshore Wind Project, Sells Stake to Ocean Winds

Business & Finance

March 21, 2024, by Adnan Memija

Shell New Energies, a subsidiary of Shell, has sold its 50 per cent equity share in SouthCoast Wind Energy, established in 2018 to develop wind projects off the coast of Massachusetts, to its joint venture partner Ocean Winds North America for an undisclosed sum.

According to Shell, the deal with Ocean Winds was structured to simultaneously sign and close, with an immediate effective date.

“Ocean Winds and SouthCoast Wind are intensely focused on the joint procurement process for offshore wind energy being undertaken by Connecticut, Rhode Island and Massachusetts and completing permitting and development of this clean energy project,” said Michael Brown, OW’s North America CEO.

Ocean Winds, a 50:50 joint venture between ENGIE and EDP Renewables, said it continues a partnership strategy in the US and intends to bring in a new 50 per cent partner ahead of the final investment decision for SouthCoast Wind.

Formerly known as Mayflower Wind, SouthCoast Wind was set up by the partners to develop a 2.4 GW offshore wind project after winning a leasing round in December 2018.

The lease area where the developers plan to build the project is located south of Martha’s Vineyard and Nantucket, where up to 147 offshore wind turbines are planned to be installed.

The joint venture has developed two Mayflower Wind projects in the lease area so far, the 405 MW Mayflower Wind and the 804 MW Mayflower Wind 2, which were merged into one project in 2022 and renamed into SouthCoast Project. The two already-developed offshore wind projects will make up for the first 1.2 GW of the total 2.4 GW SouthCoast Project.

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The decision to offload the stake comes among challenging business conditions for the US offshore wind developments. Various factors, including supply chain issues and rising inflation, contributed to the slowdown of the market in 2023.

In 2023, the Danish renewable energy company Ørsted decided to cancel the development of Ocean Wind 1 and Ocean Wind 2 projects offshore New Jersey. Earlier this year, Equinor and BP terminated an agreement to supply power to New York state from their proposed 1,260 MW Empire Wind 2 offshore wind farm.