New England energy company and utility Eversource says it has initiated a review of its relationship with offshore wind developer Ørsted
Announcing details of its Q1 2022 results, Eversource president and chief executive Joe Nolan said the company had initiated a ‘strategic review’ of offshore wind investments.
Eversource is involved in transmission and distribution of electricity, natural gas and water in Connecticut, Massachusetts and New Hampshire. Offshore wind is not a central part of its activity.
The company said the review of its offshore wind investment portfolio will explore strategic alternatives that could result in a potential sale of all or part of its 50% interest in its offshore wind joint venture with Ørsted. The Eversource Energy board approved the review on 4 May 2022.
Mr Nolan said, “In light of the record-setting prices in the recent federal lease auction for areas around the New York Bight and an evolving landscape, we are conducting a 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.”
The New York Bight lease sale in February 2022 was by far the highest-grossing offshore energy lease sale in the US to date, with sums bid far exceeding any oil and gas lease sale or previous offshore wind sale.
“Eversource remains committed to supporting offshore wind with advocacy, transmission investment solutions, and clean energy resource integration,” Mr Nolan said.
“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.”
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 investment in strengthening, modernising and decarbonising its regulated energy and water delivery systems.
In February 2022, Eversource identified more than US$18Bn of regulated investment it plans to make in its systems from 2022 through 2026.
Mr Nolan said, “We are reaffirming our target earnings per share growth in the upper half of 5-7% through 2026 solely from our regulated businesses. This growth rate could be enhanced by utilising proceeds from a sale of offshore wind assets to reduce financing needs /or fund additional regulated investments to serve our 4.4M 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 projects include: South Fork Wind (130 MW); Revolution Wind (704 MW); and Sunrise Wind (924 MW). Open lease areas include up to 175,000 acres located 40 km off the Massachusetts south coast that is open for additional wind development.
Mr Nolan said Eversource solicited Ørsted’s input on the process and will continue to engage with the company as it moves forward.
