Eversource Energy has completed the sale of its uncommitted US offshore wind lease area to Orsted.
The transaction saw Eversource trade approximately 175,000 of developable acres 25 miles off the south coast of Massachusetts to the Danish developer for $625m in an all-cash transaction.
In addition, Eversource and Orsted have announced the execution of a Tax Equity Capital Contribution Agreement for their 132MW South Fork Wind project.
Eversource will use a portion of the proceeds from the lease area sale to provide its anticipated tax equity investment for South Fork Wind. The contribution for Eversource’s new tax equity member interest is expected to be approximately $545m.
Eversource expects to recover this primarily in the form of investment tax credits as turbines are placed in service for South Fork.
These credits will be utilised to reduce federal tax liability, including refunds expected over the next nine months.
Eversource also expects to receive approximately $273m of this contribution as a distribution from the project prior to its commercial operations date, as it currently remains a managing member of the site, along with Orsted.
As a result of Eversource completing its Offshore Wind Strategic Review, the company announced it is in the best long-term interest of the company to advance the sale of its existing 50% stake in its three jointly owned contracted offshore wind projects (South Fork Wind, Revolution Wind, and Sunrise Wind) with a total capacity of 1758MW.
“Eversource is fully committed to being a catalyst to the region’s clean energy transition, with our regulated companies procuring power from offshore wind as well as building many of the facilities that will enable more than 9000MW of offshore wind generation to reach the homes and businesses of Southern New England,” said Eversource’s president, chief executive officer, and chairman Joe Nolan.