Eversource undertakes strategic review of offshore wind interests

4C Offshore | Tom Russell
By: 05/05/2022 Eversource
Eversource has initiated a strategic review of its offshore wind investment portfolio. As part of that review, the company will explore strategic alternatives that could result in a potential sale of all or part of its 50 percent interest in its offshore wind joint venture with Ørsted.

Eversource expects to complete this review during 2022. If the recommended path forward following the strategic review is a sale of all or part of Eversource’s interest in the joint venture, Eversource expects potential proceeds from such transaction would likely be used to support its regulated investments in strengthening, modernizing and decarbonizing its regulated energy and water delivery systems. The company stated that in February 2022 it identified more than $18 billion of regulated investments it plans to make in its systems from 2022 through 2026. Some potential additional initiatives, such as advanced metering infrastructure and additional transmission investments to connect offshore wind projects through Cape Cod, are not yet reflected in its long-term forecast.

Joe Nolan, Eversource’s president and chief executive officer, said: “In light of the record-setting prices in the recent federal lease auction for tracts around the New York Bight and an evolving landscape, we are conducting a fulsome review of our interest in the joint venture with Ørsted to assess alternatives that will allow us to create shareholder value and continue building a leading clean energy company that is wholly supportive of our region’s climate change goals. Eversource remains committed to supporting offshore wind with advocacy, transmission investment solutions, and clean energy resource integration. We have seen up close why Ørsted is unquestionably the world leader in engineering, building and operating offshore wind and have no doubt that the joint venture we launched five years ago will be a tremendous source of clean energy and economic development for the Northeast.

“Today, we are reaffirming our target earnings per share growth in the upper half of 5-7 percent through 2026 solely from our regulated businesses. This growth rate could be enhanced by utilizing proceeds from a sale of offshore wind assets to reduce financing needs and/or fund additional regulated investments to serve our 4.4 million customers.”

The joint venture includes three contracted projects with a total capacity of approximately 1,758 MW, as well as up to 175,000 acres of offshore wind area not allocated to a specific project.

These include the
South Fork Wind (130 MW) project located 35 miles east of Long Island’s Montauk Point, will interconnect into eastern Long Island where it will deliver power to households under a long-term power purchase agreement with the Long Island Power Authority. Construction of South Fork Wind began in early 2022 and the project is expected to be placed into service in late 2023.

Its interest with Ørsted include
Revolution Wind (704 MW) located approximately 15 miles south of the Rhode Island coast, will deliver power under long-term contracts to Rhode Island (400 MW) and Connecticut (304 MW).It is expected to be placed in service in 2025.

The joint projects also included
Sunrise Wind (924 MW), located approximately 30 miles east of Long Island’s Montauk Point. It is expected to deliver power to New York State under a long-term purchase agreement with NYSERDA. Sunrise Wind is expected to be commissioned in late 2025.

The partners also have a joint interest in up to 175,000 acres located 25 miles off the Massachusetts South Coast that is open for additional wind development.

As the strategic review proceeds, Eversource remains committed to continue providing oversight of the siting and construction of onshore elements of the three active projects noted above. The company stated continued strong progress on these three important offshore wind projects will not be affected by its strategic review.

Nolan added: “Eversource has solicited Ørsted’s input on the process of our strategic review and will continue to engage with our partner as the process moves forward.”

Eversource has engaged Goldman Sachs and Ropes & Gray as advisors for this strategic review. Eversource stated that it cannot provide assurances regarding the outcome of this review.

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