Ørsted Has New U.S. Wind Partner as Eversource Exits and GIP Enters
Institutional investors continue to show interest in the developing offshore energy sector demonstrated by the closing of a deal that rearranges the partnership for Ørsted in its U.S. offshore wind energy projects. Global Infrastructure Partners, which was acquired by famed group BlackRock, completed the previously announced deal to buy Eversource Energy’s 50 percent interest in two wind farms with Ørsted.
Eversource had previously announced its intent to exit the offshore wind sector to focus on operations as a pure-play regulated pipes and wires utility. They agreed earlier this year to sell their share of the planned Sunrise Wind project to Ørsted and yesterday completed the sale of its shares in South Fork Wind and Revolution Wind to Global Infrastructure Partners (GIP). While Eversource has exited its offshore wind investments, the company remains a contractor on the ongoing onshore construction scope for Revolution Wind, and a tax equity investor in South Fork Wind.
The final price for the 50 percent shares of the two U.S. offshore wind farms was $745 million, which was reduced by approximately $375 million from the original value of $1.12 billion on the deal. Eversource cited increased construction costs and delays for Revolution Wind. With a $370 million gain on the separate sale of Sunrise Wind, Eversource still expects to record a loss of $520 million for the divestiture of its offshore wind interests.
GIP, however, cites the strong opportunities in renewable energy. Today, October 1, BlackRock completed the acquisition of GIP with the two companies also emphasizing their positioning as an industry leader in infrastructure and strong position in renewable energy.
A new joint venture partnership will be launched between Ørsted and Skyborn Renewables, a GIP portfolio company, for the two offshore wind projects. The companies emphasized that this reaffirms the opportunity in American clean energy.
In partnership with GIP, Ørsted will continue its operations of the 132-megawatt South Fork Wind farm, and finalize construction of the 704-megawatt Revolution Wind project and transition it into its operational phase. South Fork Wind went into operation in March 2024 as America’s first utility-scale offshore wind farm supplying power to New York. Construction is underway on Revolution Wind, which will serve Rhode Island and Connecticut, and in September it marked the installation of its first wind turbine offshore.
Ørsted previously acquired Eversource’s 50-percent stake in the 924-megawatt New York Sunrise Wind project, share of uncontracted offshore wind seabed (Lease 500), and key Northeast operational assets.
As part of a growing Northeast hub, Ørsted also has full ownership of partnerships with the Port of Providence, the Port of Davisville, and Quonset Point, all in Rhode Island, and with Connecticut's New London State Pier. Ørsted also acquired ownership of the future operations and maintenance hub in East Setauket, N.Y., and the charter agreement for the first American-built offshore wind service operations vessel Eco Edison.
Institutional investors are showing increasing interest in the offshore energy sector as it begins to mature and promises consistent returns. Energy companies such as Eversource however which were early investors in the sector have retreated as the problems emerged that drove up costs and delayed the offshore projects.