Ørsted to acquire partner’s share of Sunrise Wind in conditional agreement — EnergyWatch

Energy company Ørsted has signed an agreement to acquire joint venture partner Eversource’s stake in the Sunrise Wind offshore wind project. No purchase price is disclosed.

This is according to Ørsted in a statement to the stock exchange.

However, the agreement is subject to Sunrise Wind winning New York’s ongoing fourth offshore auction and entering into an electricity sales agreement, an OREC contract, with the New York State Energy Research and Development Authority, Nyresda.

”Orec” stands for ”Offshore Wind Renewable Energy Certificate”.

In addition to the first two conditions, it is also a condition for the execution of the agreement that full transaction agreements are entered into, the construction and operation plan is approved and finally all necessary regulatory approvals are obtained.

”Following a thorough risk review of our US portfolio, we’re comfortable with taking full ownership of Sunrise Wind if the project is awarded in New York 4. This transaction is a value-accretive opportunity for Ørsted and the best path forward for the project,” said David Hardy, Executive Vice President and CEO of Region Americas at Ørsted, in the announcement.

Sunrise Wind is a 924 megawatt (MW) offshore wind project previously awarded to Ørsted and Eversource, but rising prices, higher interest rates, and supply chain delays have impacted the project’s profitability, and as a result, the existing OREC agreement will be canceled if Sunrise is not successful in the new tender.

Ørsted and Eversource have previously attempted to negotiate higher electricity settlement prices with Nyresda, but this was rejected by regulators last year.

”Ørsted’s and Eversource’s 50/50 joint venture for Sunrise Wind will remain in place. In that scenario, the joint venture will evaluate its next steps. If the project is provisionally awarded, a new contract will be negotiated with Nyserda under the updated terms of the current solicitation,” it says.

Sunrise Wind could potentially be operational and producing power in 2026.

Ørsted and Eversource are also 50/50 joint venture partners in the Southfork Wind and Revolution Wind offshore wind projects.

Ørsted has written down the value of offshore wind, onshore wind and solar projects in the US for a total of DKK 28.4 billion, according to its financial statements for the third quarter of 2023.

Specific figures for Sunrise Wind have not been disclosed by Ørsted, but its partner Eversoucre has written down USD 800-900 million across all three projects with Ørsted, and an additional USD 600-700 million specifically for Sunrise Wind.

In the announcement, Ørsted maintains its guidance for 2023.