Utility Eversource weighs split from US offshore wind partner Ørsted

US utility Eversource Energy has launched a strategic review of its offshore wind joint venture (JV) with Danish energy giant Ørsted, and is considering selling part or all of its 50% stake.

The two companies are developing three offshore wind farms totalling 1.75GW off the US’s east coast. The three projects are backed by long-term power deals. They have also secured a 700km² lease off the  of Massachusetts for additional offshore wind development.

Eversource president Joe Nolan said the review was launched “in light of the record-setting prices in the recent federal lease auction for tracts around the New York Bight and an evolving landscape”. Ørsted and Eversource were unsuccessful in the tender, and successful participants eventually won with bids totally more than $4 billion for tracts off the New York and New Jersey coast.

Nolan added that the utility would “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”.

If it sells its stake in the joint venture with Ørsted, Eversource would likely use proceeds to strengthen, modernise and decarbonise its energy and water delivery systems, the company stated. It has identified about $18 billion of investments it needs to make in these areas by 2026.

Eversource has hired law firms Goldman Sachs and Ropes & Gray as advisers for this strategic review. It has also asked for Ørsted’s input on the review.

The utility expects to complete the review in 2022.

It insists the review will not hinder development of its three offshore wind farms, including the 130MW South Fork Wind South Fork Wind (130MW) Offshoreoff Long Island, New York, USA, North America Click to see full details project, which is expected to be commissioned in 2023.

David Hardy, CEO of Ørsted North American offshore business said: “We will be engaged in the strategic review throughout the process, while Eversource and Ørsted continue to advance and build out projects in the joint venture unimpacted by this initiative.”

Ørsted would not comment on whether it may or may not consider buying out Eversource.