Eversource sells stake in LI project as offshore wind faces new setbacks
An operational wind turbine at the South Fork Wind farm in the Atlantic Ocean on Dec. 7. Credit: Newsday/Steve Pfost
Eversource, the New England utility that had been a partner in two offshore wind farms slated for Long Island, has sold its interest in South Fork Wind and another project to Global Infrastructure Partners, a firm purchased last month by investment giant BlackRock.
The $2 billion South Fork Wind farm, a 132-megawatt project expected to be completed in coming weeks or months, began sending energy to Long Island’s South Fork in December. Eversource had developed South Fork with Orsted of Denmark.
Under terms of the deal, Eversource will offload its 50% interest in South Fork Wind and Revolution Wind, a New England project, for $1.1 billion in cash.
The closing of the deal comes amid continuing headwinds for the nascent U.S. offshore wind industry.
Last week, S&P Global Ratings downgraded Orsted’s rating a notch, citing the company’s “weaker project management and tougher-than expected local market conditions” after Orsted took more than $4 billion in impairment charges — a decline in the value of assets — tied to U.S. offshore wind interests.
The company has said it plans to lay off up to 800 employees globally while exiting offshore wind markets in Norway, Spain and Portugal. “We now view construction of offshore wind parks as riskier than in the past, notably in the U.S.,” S&P said in its ratings report.
Eversource last month reached a related agreement to sell its 50% stake in Sunrise Wind, another project with energy destined for Long Island, to Orsted pending the outcome of a state bidding process. New York is reviewing bids for offshore wind contracts that allowed developers to seek a higher price for previously awarded projects to account for rising inflation, interest rates and project costs. The state is expected to announce the winning bidders this month.
At the same time, wind turbine maker GE Vernova was reported last week to be reconsidering its plans to make the industry’s largest 18-megawatt wind turbines, which had been slated to be used in three big projects awarded for the waters off Long Island and New Jersey.
The New York State Energy Research and Development Authority (NYSERDA), which administers the contracts, said it was “aware of the reports” that GE won’t advance the largest turbines and said negotiations are “ongoing with the provisional awardees” from last year's bids. News website Politico called the change a “setback” for the state's energy production plans.
In a statement, GE Vernova said, “We continue to work with our customers and the state of New York in an effort to reach a final agreement” on turbine supply. Use of smaller turbines could necessitate more generators to hit promised power output.
Vineyard Offshore, one of the winning bidders for the New York Bight area, said in a statement, “GE made specific commitments to developers and to the state of New York to deliver an 18- megawatt machine, which was a core component underpinning our Excelsior Wind project.”
“GE’s decision to walk away from this commitment is extremely disappointing,” Vineyard Offshore spokeswoman Kathryn Niforos said in an email. “Our team is working to address this recent development with both GE and NYSERDA, and we remain committed to delivering the Excelsior Wind project and to helping NY reach its clean energy goals.”
Community Offshore Wind, a partnership of National Grid Ventures and RWE, which was also among the winning bidders for that lease area, said it remains “committed to delivering on our promise of developing a strong and viable project to New York.” President Doug Perkins added, “We expect our supply-chain partners to deliver on their commitments to allow New York to achieve its clean energy and climate goals.”
Last month, Equinor, a Norway-based energy giant, announced that it had terminated its contract for Empire Wind 2, a project whose energy was destined for Long Island more than 20 miles from Long Beach, while continuing to pursue Empire Wind 1, with power destined for New York City. The latter will have turbines less than 15 miles from Long Beach and send its energy to a Brooklyn substation.
Equinor and partner BP last month also divided their joint-venture assets, with BP taking control of Beacon Wind projects. BP last week took $1.1 billion in impairment charges on its U.S. offshore wind portfolio, while signaling that it was in no rush to build the previously awarded Beacon Wind 1 project.
Orsted in late 2023 canceled two offshore wind farms it had planned to build in New Jersey, and in January also announced that it withdrew two previously awarded wind farms planned for the waters off Maryland.
Eversource, the New England utility that had been a partner in two offshore wind farms slated for Long Island, has sold its interest in South Fork Wind and another project to Global Infrastructure Partners, a firm purchased last month by investment giant BlackRock.
The $2 billion South Fork Wind farm, a 132-megawatt project expected to be completed in coming weeks or months, began sending energy to Long Island’s South Fork in December. Eversource had developed South Fork with Orsted of Denmark.
Under terms of the deal, Eversource will offload its 50% interest in South Fork Wind and Revolution Wind, a New England project, for $1.1 billion in cash.
The closing of the deal comes amid continuing headwinds for the nascent U.S. offshore wind industry.
- New England utility Eversource has sold its interest in South Fork Wind and another project to Global Infrastructure Partners, a firm purchased last month by investment giant BlackRock.
- Under terms of the deal, Eversource will offload its 50% interest in South Fork Wind and Revolution Wind, a New England project, for $1.1 billion in cash.
- Wind turbine maker GE Vernova reportedly is reconsidering plans to make the industry’s largest 18-megawatt wind turbines, which had been slated to be used in three projects off Long Island and New Jersey.
Last week, S&P Global Ratings downgraded Orsted’s rating a notch, citing the company’s “weaker project management and tougher-than expected local market conditions” after Orsted took more than $4 billion in impairment charges — a decline in the value of assets — tied to U.S. offshore wind interests.
The company has said it plans to lay off up to 800 employees globally while exiting offshore wind markets in Norway, Spain and Portugal. “We now view construction of offshore wind parks as riskier than in the past, notably in the U.S.,” S&P said in its ratings report.
Eversource last month reached a related agreement to sell its 50% stake in Sunrise Wind, another project with energy destined for Long Island, to Orsted pending the outcome of a state bidding process. New York is reviewing bids for offshore wind contracts that allowed developers to seek a higher price for previously awarded projects to account for rising inflation, interest rates and project costs. The state is expected to announce the winning bidders this month.
At the same time, wind turbine maker GE Vernova was reported last week to be reconsidering its plans to make the industry’s largest 18-megawatt wind turbines, which had been slated to be used in three big projects awarded for the waters off Long Island and New Jersey.
The New York State Energy Research and Development Authority (NYSERDA), which administers the contracts, said it was “aware of the reports” that GE won’t advance the largest turbines and said negotiations are “ongoing with the provisional awardees” from last year's bids. News website Politico called the change a “setback” for the state's energy production plans.
In a statement, GE Vernova said, “We continue to work with our customers and the state of New York in an effort to reach a final agreement” on turbine supply. Use of smaller turbines could necessitate more generators to hit promised power output.
Vineyard Offshore, one of the winning bidders for the New York Bight area, said in a statement, “GE made specific commitments to developers and to the state of New York to deliver an 18- megawatt machine, which was a core component underpinning our Excelsior Wind project.”
“GE’s decision to walk away from this commitment is extremely disappointing,” Vineyard Offshore spokeswoman Kathryn Niforos said in an email. “Our team is working to address this recent development with both GE and NYSERDA, and we remain committed to delivering the Excelsior Wind project and to helping NY reach its clean energy goals.”
Community Offshore Wind, a partnership of National Grid Ventures and RWE, which was also among the winning bidders for that lease area, said it remains “committed to delivering on our promise of developing a strong and viable project to New York.” President Doug Perkins added, “We expect our supply-chain partners to deliver on their commitments to allow New York to achieve its clean energy and climate goals.”
Last month, Equinor, a Norway-based energy giant, announced that it had terminated its contract for Empire Wind 2, a project whose energy was destined for Long Island more than 20 miles from Long Beach, while continuing to pursue Empire Wind 1, with power destined for New York City. The latter will have turbines less than 15 miles from Long Beach and send its energy to a Brooklyn substation.
Equinor and partner BP last month also divided their joint-venture assets, with BP taking control of Beacon Wind projects. BP last week took $1.1 billion in impairment charges on its U.S. offshore wind portfolio, while signaling that it was in no rush to build the previously awarded Beacon Wind 1 project.
Orsted in late 2023 canceled two offshore wind farms it had planned to build in New Jersey, and in January also announced that it withdrew two previously awarded wind farms planned for the waters off Maryland.
Mark Harrington, a Newsday reporter since 1999, covers energy, wineries, Indian affairs and fisheries.
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