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Written by John Egan for Industrial Info Resources (Sugar Land, Texas)--New England utility holding company Eversource Energy Incorporated (NYSE:ES) (Boston, Massachusetts and Hartford, Connecticut) is letting go of its offshore wind power ambitions and instead turning inward, with plans to boost core infrastructure capital spending by about $1 billion per year compared to previous years' capital expenditures.
Eversource, which provides electricity, natural gas and water service to about 4.4 million customers in Connecticut, Massachusetts and New Hampshire, plans to spend an average of $4.3 billion annually over the 2023-2027 period, or about $21.5 billion on capital projects. By contrast, for the 2020-2022 period, it spent about $3.5 billion per year on those businesses, for a three-year total of $10.4 billion.
The company's electric distribution unit will receive about 41% of the 2023-2027 capital spend, about $8.9 billion, with electric transmission and natural gas service each getting about 25% of the remaining investment dollars. The planned capital outlays were contained in the company's first-quarter earnings presentation to investors, released May 3.
Three weeks after Eversource reported first-quarter earnings, it announced it was getting out of the offshore wind power business. It agreed to sell its 50% interest in a currently uncommitted offshore wind power lease area of approximately 175,000 developable acres located 25 miles off the south coast of Massachusetts to Ørsted, which had been its joint-venture partner. The all-cash sale will bring about $625 million into Eversource's coffers. The transaction is expected to close later this year.
In that same May 25 announcement, Eversource officials said they also determined that it would be in the "best long-term interest of the company to advance the sale of its existing 50% interest in its three jointly owned contracted offshore wind projects (South Fork Wind, Revolution Wind, and Sunrise Wind) with a total capacity of 1,758 MW." Company officials said the sale process "continues to progress" and Eversource anticipates an announcement by the end of June.
Eversource Chairman, President and Chief Executive Joe Nolan said, "While we are pursuing an exit of the unregulated offshore wind business, Eversource is fully committed to being a catalyst to the region's clean energy transition, with our regulated companies building many of the facilities that will enable more than 9,000 megawatts (MW) of offshore wind generation to reach the homes and businesses of Southern New England. We share the same goals as the states in which we operate when it comes to building the clean energy delivery systems of the future."
Rising project costs for completing offshore wind projects may have shaped Eversource's decision. Prior to the May 25 announcement, Eversource has invested about $2.16 billion in its offshore wind business, and additional outlays of $2.1 billion to $2.4 billion were anticipated over the 2024-2026 period. Three months earlier, those 2024-2026 expected costs were $1.6 billion to $1.9 billion.
Industrial Info is tracking about 35 capital projects involving Eversource or a subsidiary, with total investment value of $2.26 billion. The largest single planned project is the 400-MW, $800-million Constitution offshore wind project, which is being developed with Ørsted. That project is scheduled to begin construction in early 2025 and be operating by yearend 2027. The Constitution project is not included in the package of three planned offshore wind projects (South Fork Wind, Revolution Wind and Sunrise Wind) that Eversource has publicly disclosed it is seeking to sell.
Most of Eversource's other capital projects include transmission line upgrades and rebuilds. The company also is stepping up its vegetation management efforts, to reduce the probability of wind-blown branches and debris would come into contact with the electrical system and lead to outages.
On May 3, Eversource reported higher first-quarter earnings compared to the comparable year-earlier period: $491.2 million compared to $443.4 million. The company's three main lines of business -- electric distribution, electric transmission and natural gas distribution -- reported higher first-quarter earnings this year compared to last year.
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking over 200,000 current and future projects worth $17.8 Trillion (USD).
Eversource, which provides electricity, natural gas and water service to about 4.4 million customers in Connecticut, Massachusetts and New Hampshire, plans to spend an average of $4.3 billion annually over the 2023-2027 period, or about $21.5 billion on capital projects. By contrast, for the 2020-2022 period, it spent about $3.5 billion per year on those businesses, for a three-year total of $10.4 billion.
The company's electric distribution unit will receive about 41% of the 2023-2027 capital spend, about $8.9 billion, with electric transmission and natural gas service each getting about 25% of the remaining investment dollars. The planned capital outlays were contained in the company's first-quarter earnings presentation to investors, released May 3.
Three weeks after Eversource reported first-quarter earnings, it announced it was getting out of the offshore wind power business. It agreed to sell its 50% interest in a currently uncommitted offshore wind power lease area of approximately 175,000 developable acres located 25 miles off the south coast of Massachusetts to Ørsted, which had been its joint-venture partner. The all-cash sale will bring about $625 million into Eversource's coffers. The transaction is expected to close later this year.
In that same May 25 announcement, Eversource officials said they also determined that it would be in the "best long-term interest of the company to advance the sale of its existing 50% interest in its three jointly owned contracted offshore wind projects (South Fork Wind, Revolution Wind, and Sunrise Wind) with a total capacity of 1,758 MW." Company officials said the sale process "continues to progress" and Eversource anticipates an announcement by the end of June.
Eversource Chairman, President and Chief Executive Joe Nolan said, "While we are pursuing an exit of the unregulated offshore wind business, Eversource is fully committed to being a catalyst to the region's clean energy transition, with our regulated companies building many of the facilities that will enable more than 9,000 megawatts (MW) of offshore wind generation to reach the homes and businesses of Southern New England. We share the same goals as the states in which we operate when it comes to building the clean energy delivery systems of the future."
Rising project costs for completing offshore wind projects may have shaped Eversource's decision. Prior to the May 25 announcement, Eversource has invested about $2.16 billion in its offshore wind business, and additional outlays of $2.1 billion to $2.4 billion were anticipated over the 2024-2026 period. Three months earlier, those 2024-2026 expected costs were $1.6 billion to $1.9 billion.
Industrial Info is tracking about 35 capital projects involving Eversource or a subsidiary, with total investment value of $2.26 billion. The largest single planned project is the 400-MW, $800-million Constitution offshore wind project, which is being developed with Ørsted. That project is scheduled to begin construction in early 2025 and be operating by yearend 2027. The Constitution project is not included in the package of three planned offshore wind projects (South Fork Wind, Revolution Wind and Sunrise Wind) that Eversource has publicly disclosed it is seeking to sell.
Most of Eversource's other capital projects include transmission line upgrades and rebuilds. The company also is stepping up its vegetation management efforts, to reduce the probability of wind-blown branches and debris would come into contact with the electrical system and lead to outages.
On May 3, Eversource reported higher first-quarter earnings compared to the comparable year-earlier period: $491.2 million compared to $443.4 million. The company's three main lines of business -- electric distribution, electric transmission and natural gas distribution -- reported higher first-quarter earnings this year compared to last year.
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking over 200,000 current and future projects worth $17.8 Trillion (USD).
