Eversource to sell off stake in offshore wind

Connecticut’s largest electric distributor Eversource will sell off its stake in three offshore wind projects off the Northeast coast, according to the minutes of their latest earnings call.

Eversource partnered with Danish company Ørsted to develop three offshore wind projects in the Northeast, including South Fork Wind off New York and Sunrise and Revolution Wind off the coast of Massachusetts and Rhode Island. Now, the energy giant is looking to pull back.

“We continue to make progress on the strategic review of our offshore wind investment,” Eversource CEO Joseph R. Nolan said. “We have shortlisted final interested parties in both our three offshore wind projects and a nearly 175,000 acres of uncommitted lease areas that are part of our 50-50 joint venture with Ørsted.”

“Although offshore wind may not be a right fit for our portfolio of regulated T&D assets, we are big believers in the essential role offshore wind will play in bringing much needed clean energy to the new England region and lessening our reliance on natural gas for power generation,” Nolan continued.

The State of Connecticut is pouring hundreds of millions into redeveloping the State Pier as a hub for offshore wind development, a process that has been fraught with ethical, financial and political problems from the beginning, but is moving forward anyway. Eversource and Ørsted contributed $77.5 million to the project, which is now totaling $255 million in costs. The project is set for completion in the near future.

But that near future will not include Eversource – at least on the building side. The expectation that Eversource will decouple from Ørsted has been coming for the past year, with Nolan previously saying he wanted to focus more on Everource’s land assets and hired Goldman Sachs to complete a review its clean energy portfolio.

In response to a question, Nolan indicated that the sale process is complicated but “will involve two parties,” and is far along in the process with an announcement expected near future. 

“On the project side, these are very mature projects. These are not just concepts on paper,” Nolan said. “We’re pleased with what we’re seeing. We’re pleased with the results, and I think at the end of the day, it will be a very good outcome for Eversource and Eversource’s shareholders.”

Eversource has, thus far, invested a total of $2.16 billion in offshore wind for its three projects, according to the meeting minutes. During the question-and-answer portion of the earnings call, Nolan said he saw “a path for a clean exit” from offshore wind without retaining any ownership in the joint venture.

“So, we see a tremendous opportunity for investment in offshore wind as it relates to our regulated business,” Nolan said in response to another question. “Our focus has been around de-risking and focusing on the regulated assets.”

“We won’t have any ownership of building wind, but with transmission-related assets to help them inject clean energy into the New England and New York grid,” Nolan continued.

John Olivieri, who handles communications for Eversource’s offshore wind work, says they do not expect any impact to the Revolution Wind project due to the strategic review.