Eversource has officially exited the offshore wind business following the sale of its 50% stakes in two key wind projects: the 132-megawatt (MW) South Fork Wind and the 704 MW Revolution Wind projects. The sale was made to Global Infrastructure Partners (GIP) for $745 million, which was $375 million less than the expected purchase price of $1.12 billion.
This decrease in proceeds was primarily attributed to a reduction in capital spending and a delay in the commercial operation of Revolution Wind. Despite exiting the offshore wind sector, Eversource’s CEO, Joe Nolan, emphasized the company’s continued role in the clean energy transition through its expertise in transmission projects that support renewable energy.
The decision to exit offshore wind followed a challenging financial year for Eversource. Earlier in 2023, the company announced it would record an after-tax impairment charge of $1.4 billion to $1.6 billion, largely due to cost overruns and scheduling issues with its wind investments.
Eversource Exits Offshore Wind Sector with $745M Sale Amid Financial Struggles and Project Delays
This included a charge of $800 million to $900 million related to South Fork Wind, Revolution Wind, and Sunrise Wind. Rising construction costs and economic uncertainties further impacted the valuation of these offshore wind projects.
The financial difficulties were compounded in October 2023 when the New York State Public Service Commission denied petitions from offshore wind developers, including Sunrise Wind, that sought additional funding for several offshore wind and land-based renewable projects.
The Commission’s decision was aimed at maintaining a fair and cost-effective bidding process for renewable energy in the state. This decision placed further financial strain on the involved projects and affected Eversource’s ability to generate additional revenue from its wind investments.
In February, Eversource took steps to offload its offshore wind assets, signing an agreement to sell its 50% ownership in South Fork Wind and Revolution Wind to GIP. By July, Eversource also completed the sale of its stake in the 924-MW Sunrise Wind project to Ørsted, a Danish renewable energy company.
The total proceeds from the Sunrise Wind sale amounted to $230 million, with payments tied to construction milestones. Although Eversource no longer holds an ownership stake, it will continue to provide onshore construction services for Sunrise Wind under a new agreement.
With the divestment of its offshore wind assets complete, Eversource expects to record a net loss of approximately $520 million by the third quarter of 2024. This loss includes a final gain of $370 million from the sale of Sunrise Wind, offset by rising costs related to the Revolution Wind project and other associated expenses.
The company anticipates recognizing a liability of $360 million as part of this loss, which will likely be settled by 2026. Despite the financial losses, Eversource remains committed to its broader strategy as a regulated utility focused on delivering energy services.
