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Dive Brief:

  • Eversource Energy said Thursday it has agreed to sell its 50% stake in its offshore wind lease area off Massachusetts to its partner, Danish energy company Ørsted, for $625 million in cash. The deal is expected to close by the end of the third quarter, subject to regulatory approvals.
  • The sale, which caps a review that began in May 2022 following record-setting prices in a federal lease auction around the New York Bight, does not include a 50% interest in its joint ownership with Ørsted of the South Fork Wind, Revolution Wind and Sunrise Wind offshore projects. An announcement of a sale of the sites, with a capacity of 1,758 MW, is expected by the end of June, Eversource said.
  • CEO Joe Nolan said Eversource remains “fully committed to being a catalyst to the region’s clean energy transition” with its regulated companies building many of the facilities that will transmit more than 9,000 MW of offshore wind generation to southern New England. 

Dive Insight:

The Boston- and Hartford, Connecticut-based utility said it cannot provide assurances regarding the outcome of the sale process of its three offshore projects that will serve Connecticut, New York and Rhode Island. They are expected to begin operation later this year and in 2025 and will provide more than 1.7 GW of renewable capacity, or enough to power more than 1 million homes.

Eversource said it expects its second quarter results will include an impairment charge of between $220 million and $280 million. It said it has evaluated its investment in the three projects, the 175,000 acres of offshore wind area not allocated to a project and “other capitalized costs” following numerous bids and “indicative offers” and believes that an “other-than-temporary impairment exists.”

The current estimate of fair value is based on the anticipated potential sale price of Eversource’s 50% interest of the three contracted projects and sale of the lease area. Proceeds from the transaction will be used to pay off debt.

Eversource paid $225 million in 2019 for the 50% interest in Ørsted’s Revolution Wind and South Fork wind farms and the tract off Massachusetts and Rhode Island.

Ørsted will take ownership of partnerships with the Port of Providence, Port of Davisville and Quonset Point, all in Rhode Island, and at Connecticut’s State Pier in New London.

It will also be the owner of the operations and maintenance hub in East Setauket on New York’s Long Island and will take ownership of the charter agreement for the offshore wind service operations vessel being built in Louisiana.

David Hardy, group executive vice president and CEO Americas at Ørsted, said the combination of the seabed and additional components in its agreement with Eversource “further establish a major hub in the Northeast for our activities and future opportunities.”