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May 26, 2023

Eversource to sell stake in offshore wind development site for $650M

Photo | Wikimedia Commons Ørsted North America's Block Island offshore wind farm.

Eversource Energy has taken another step to get out of the offshore wind farm business. 

The Hartford and Boston-based utilities company announced Thursday that it will sell its 50% interest in a currently uncommitted lease area of approximately 175,000 developable acres located 25 miles off the south coast of Massachusetts to Danish wind farm developer Ørsted for $625 million.

Ørsted currently owns the other 50% share of the joint venture, including the uncommitted lease area. 

The all-cash deal is expected to close by the end of the third quarter of 2023, subject to regulatory approvals. 

Eversource said it has entered into a binding letter of intent with Ørsted to use a portion of the proceeds from the lease sale to provide tax equity for the South Fork Wind project through a new tax equity ownership interest. That 132 MW project is New York’s first offshore wind farm currently under construction, 35 miles east of Montauk Point. 

Eversource said it will recover this investment primarily in the form of investment tax credits that will be received around the time of the project’s commercial operations date. 

The South Fork project is expected to be operational later this year. Eversource’s tax equity investment in South Fork Wind is also expected to close in the third quarter. 

Eversource said it will also advance the sale of its existing 50% interest in its three jointly owned contracted offshore wind projects (South Fork Wind, Revolution Wind, and Sunrise Wind) with a total capacity of 1,758 MW. 

“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. 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 Joe Nolan, Eversource’s president, chief executive officer, and chairman. “While we are pursuing an exit of the unregulated offshore wind business, Eversource is fully committed to being a catalyst to the region’s clean energy transition, with our regulated companies building many of the facilities that will enable more than 9,000 megawatts of offshore wind generation to reach the homes and businesses of Southern New England. We share the same goals as the states in which we operate when it comes to building the clean energy delivery systems of the future.”

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