Danish company Ørsted, a developer, builder and operator of offshore wind farms, has agreed to acquire Eversource Energy’s 50% interest in the uncontracted federal offshore wind lease area currently owned jointly by the two companies.
The $625 million, all-cash transaction is expected to close by the end of the third quarter.
Located 25 miles off the south coast of Massachusetts, the expanse, known as Lease Area OCS-A 500 (Lease 500), contains approximately 187,000 uncontracted acres of seabed for American offshore wind energy and has a potential capacity of up to 4 GW.
Lease 500 is strategic to Ørsted’s U.S. offshore wind portfolio. In addition to its proximity to existing Ørsted projects, the site also offers shallow water depth and favorable wind speeds compared to other sites in the U.S. and globally. It can also serve four markets, including Massachusetts, Rhode Island, Connecticut and New York.
In conjunction with this agreement, Ørsted also will acquire contracts and leases for strategic port facilities and other assets in the Northeast.
It will 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. It will also assume full ownership 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 the Edison Chouest Offshore facility in Houma, La., and more than 50% complete.
“I want to thank Eversource for our six-year partnership and for their expertise,” says David Hardy, group executive vice president and CEO Americas at Ørsted. “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.”
Says Joe Nolan, president, chairman and CEO of Eversource: “We have had the pleasure of working alongside Ørsted for more than six years and have experienced firsthand their expertise and global leadership in the offshore wind sector.”
In addition to selling its share of the uncontracted seabed and other interests to Ørsted, Eversource, which operates New England’s largest energy delivery system, will sell its 50% interest in its three contracted offshore wind projects (South Fork Wind, Revolution Wind and Sunrise Wind), which have a total capacity of 1,758 MW and are also jointly owned with Ørsted.
As part of the agreement with Ørsted, Eversource will provide tax equity for the South Fork Wind project. Securing the tax equity arrangement is a critical milestone for South Fork Wind ahead of its plan to begin operations and deliver 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.
