Danish energy company Ørsted has announced an agreement to acquire partner Eversource Energy’s 50 percent interest in a federal offshore wind lease area in the U.S. jointly owned by the two companies.
The deal, valued at $625 million, includes uncontracted seabed acreage and other assets in the Northeast region.
The lease area, referred to as Bay State Wind or Lease Area OCS-A 500 (Lease 500), spans approximately 187,000 uncontracted acres and holds the potential for up to 4 gigawatts (GW) of offshore wind energy capacity. Ørsted, formerly DONG Energy, acquired the acreage in a May 2015 federal lease sale.
As part of the agreement with Eversource, Ørsted will assume ownership of contracts and leases for port facilities and other assets, including partnerships with the Port of Providence, the Port of Davisville, and Quonset Point in Rhode Island, as well as the New London State Pier in Connecticut. Ørsted will also gain full ownership of the operations and maintenance hub in East Setauket, New York, and the charter agreement for the first American-built offshore wind service operations vessel, currently under construction at Edison Chouest’s facility in Houma, Louisiana.
With approximately 5 gigawatts in development, the deal solidifies Ørsted’s leadership in the U.S. offshore wind industry.
David Hardy, Group EVP and CEO Americas at Ørsted, thanked Eversource for their six-year partnership and acknowledged their contributions to advancing onshore scopes of three projects in Rhode Island, Connecticut, and New York. He also emphasized that the acquisition further showcases Ørsted’s commitment to the American offshore wind energy industry and solidifies their foothold in the Northeast as a major hub for future projects.
“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,” he said.
Eversource’s President, CEO, and Chairman, Joe Nolan, spoke positively about the partnership and highlighted Ørsted’s expertise and global leadership in the offshore wind sector.
The sale comes after Eversource last year announced a review of its offshore wind energy portfolio and the potential sale of related assets. In addition to the agreement with Ørsted for the uncontracted seabed and other interests, Eversource has determined that selling its existing 50 percent stake in the three jointly owned contracted offshore wind projects (South Fork Wind, Revolution Wind, and Sunrise Wind) is in the company’s long-term best interests.
“We continue to expect that offshore wind projects built in our partnership’s lease area, including the three now under development, will play a critical role in decarbonizing the generation mix of Southern New England and New York,” said Nolan.
Under the agreement, Eversource will provide tax equity for the South Fork Wind project, a significant milestone for the project as it prepares to commence operations and deliver renewable energy later this year. Eversource will continue supporting the onshore aspects of all three projects throughout the construction phase.
The agreement is subject to customary closing conditions and regulatory review and is expected to be finalized in the third quarter of 2023.