Sure, you'll see this in your next heating bill, but think of the warm glow in your heart from knowing that our politicians are saving the planet

pie in the sky

CT-based Eversource to write off up to $1.6B as it sells stake in three offshore wind farm projects

Eversource Energy expects to write off as much as $1.6 billion against its 2023 fourth quarter earnings once it completes the sale of its ownership stake in three offshore wind projects, company officials have said.

Eversouce is looking to sell its 50 percent ownership stake the company has in three wind projects it is doing in partnership with Danish wind power developer, Orsted. Monday's announcement by the company resulted in a 7.75 percent decrease in the price of Eversource stock, which finished at $58 per share at the close of trading Tuesday on the New York Stock Exchange.

The three wind power projects Eversource is selling its ownership stake in are South Fork Wind, Revolution Wind and Sunrise Wind. Officials with the company described negotiations related the ownership stake as advanced and exclusive, but did not identify the buyer or provide a timeline for the sale.

…. Erin Baker, an industrial engineering and operations research professor at the University of Massachusetts in Amherst and faculty director of the school's Energy Transition Institute, said companies like Eversource are selling their ownership stakes in wind power projects "because of a mismatch between the current interest rates and inflation and the negotiated long term contracts, at least in some cases."

"Unfortunately, since we had had such low inflation for so long, and no one saw COVID coming, the long term contracts were not inflation adjusted," Baker said. "Even now, with the knowledge of the recent inflation, it is a little tricky, as the cost of wind power is all upfront in the building and installing." [To the extent that she’s claiming that, once built, windpower is “free”, she’s lying in her panties — Ed]

Robert McCullough, managing partner of Oregon-based McCullough Research, said offshore wind power "is quite a bit more costly" than wind farms built on land. 

Bottom Line:

"The enthusiasm for offshore tends to reflect politics and lobbying rather than economics, especially given the U.S. with a vast untapped onshore wind potential," McCullough said. "The cost differential is approximately two to three times per megawatt hour. These are concerns Eversource had to address and probably a part of their decision to exit."

The charge-off, he said, is "a fairly clear signal that they believe the projects are not viable at any defensible set of assumptions."