Major US utility still bleeding red ink from Revolution Wind offshore project
Boston-based Eversource Energy takes an additional $75m hit from ill-fated joint venture with Orsted
Boston-based Eversource Energy has booked another $75m loss from its ill-fated joint venture with Orsted on the 704MW Revolution Wind array to Connecticut and Rhode Island.
The utility joined with Orsted in 2019 to develop a trio of pioneering offshore wind projects in New England, including the 132MW South Fork and 920MW Sunrise wind farm projects to New York as well as Revolution.
As South Fork is already in commercial operation, Eversource’s current liability was related to the 704MW Revolution Wind array targeted by the Trump administration with a stop-work order 22 August over alleged national security and other concerns.
Those losses continue to haunt Eversource as it retains obligations for equal sharing of construction cost overruns for the $6.25bn project.
Revolution’s overruns reached $285m in the third quarter of this year due to “insurance costs, tariff impacts, construction cost increases from damage to the Revolution Wind turbine installation vessel, and costs incurred as a result of the stop-work order,” Eversource reported.
“The net result of these impacts is an aggregate after-tax non-recurring charge of approximately $75m,” the utility said.
The developer reported in June that turbine installation was suspended for five weeks after damage was identified to one of the legs of its installation vessel.
Last year the utility record net losses of $520m, with $360m tied to the lower price it got in its sale of the projects.
While Eversource continues to feel the force of declining sector economics and President Donald Trump’s war on offshore wind, the impacts are far less than those befalling its former partner.
Orsted has booked at least $5bn in impairments for its US projects, most of that due to cancellation of its 2.25GW Ocean Wind 1 & 2 projects in 2023, before Trump ascended again to the presidency.