Danish developer Orsted has sold 50% of two pre-construction offshore wind projects, as well as two undeveloped lease areas in New England to regional utility Eversource for $225m – showing the rising value of wind zones in US waters.
The divestment includes the 704MW Revolution Wind project off the coast of Rhode Island that will deliver power to Rhode Island (400MW) and Connecticut (304MW), and the about-130MW South Fork project east of Long Island that has a long-term power purchase agreement with the Long Island Power Authority.
The state of Rhode Island only yesterday revealed that utility National Grid will pay Orsted about $98/MWh for the power from the Revolution project over a 20-year contract, or $74/MWh after accounting for inflation.
The sale also encompasses two undeveloped lease areas – Massachusetts North and Massachusetts South – which can potentially be developed into significantly above 1GW offshore wind capacity, Orsted said.
“More than ever, the US offshore wind market has great growth potential with several states committing to significant build-out volumes,” said Martin Neubert, offshore chief executive at Orsted.
“I’m delighted to extend our strategic partnership with Eversource in the North-East and welcome them to our new offshore wind projects which will enable the joint venture to harvest synergies across the different New England projects.”
Orsted and Eversource since 2016 have been partners in the Massachusetts Bay State Wind offshore project.
Subject to permitting, securing power purchase agreements and final investment decisions by Orsted and Eversource, Revolution Wind is expected to be commissioned in 2023. The project is located some 15 miles south of the Rhode Island coast.
South Fork is expected to be commissioned by the end of 2022, also subject to permitting, further development, and final investment decisions by the two utilities.
“Orsted continuously proves itself as a leader in the industry it helped to create, and this is recognised in the US with their Revolution Wind and South Fork projects,” Eversource vice president Lee Oliver said.
“We are excited to grow our partnership with Orsted, and we look forward to working with the local communities where these projects exist, where we will honour all existing commitments and work collaboratively to deliver a clean energy transformation to homes and businesses throughout the region.”
