Eversource Energy reported Monday that it is moving closer to the sale of its share of an offshore wind joint venture and has substantially completed negotiations with a potential buyer.
New England’s largest utility has been looking to exit offshore wind development for more than a year, but the process has moved slowly as financial and supply chain challenges altered the economics of its partnership with Ørsted, the world’s largest offshore wind developer.
Earlier this year, Eversource reported a $401 million impairment on its offshore wind business, which came to $331 million after taxes. (See Eversource Takes Hit on Sale of Offshore Wind Assets.)
In September, Ørsted bought out Eversource’s interest in the uncommitted wind lease area the two jointly held. Eversource is now trying to finalize the sale of its interest in the Revolution, South Fork and Sunrise projects to an as-yet undisclosed buyer.
In a Nov. 6 conference call with financial analysts, Eversource CEO Joe Nolan said the main remaining hurdle is for the potential buyer and Ørsted to finalize their joint venture agreement and other documents.
Nolan could not estimate how long that would take but said Ørsted and the buyer are familiar with one another, having engaged in other transactions.
“We expect this process to wrap up shortly,” he said.
Eversource’s stock, which has been trading near 52-week lows, closed 3.16% higher Monday.
Eversource’s 10-Q filing for the third quarter indicates the company’s total equity investment balance in its offshore wind business had reached $2.58 billion as of Sept. 30.
South Fork is under construction and is expected to start generating power later this year. The partners have decided to begin construction of Revolution next year.
Ørsted has said it would like to continue with Sunrise, but the best path to do so would be through rebidding the project with more lucrative terms.
Nolan shared the same message Monday: “Together, [Eversource and Ørsted] will work towards developing a bid that will reflect the attractive nature of this project. We feel confident that Sunrise Wind will deliver clean and reliable energy to New York and support economic development in the region, much earlier than many other projects. We will continue to evaluate ways to maximize project economics and to ensure project schedules remain on track. We have begun limited onshore construction for Sunrise Wind.”
Given the fluid nature of that project, CFO John Moreira said Eversource could see a scenario under which it sells its share of South Fork and Revolution first, then follows up with sale of its interest in Sunrise.
In its financial report, Eversource said it earned $339.7 million for the third quarter, down from $349.4 million in the same period of 2022. For the first nine months of 2023, earnings totaled $846.2 million, down from $1.08 billion in 2022.
