8-K: Eversource and rsted Re-bid Sunrise Wind Project, rsted to Potentially Take Full Ownership

Eversource and rsted have submitted a new proposal for the Sunrise Wind project in New York, with a potential agreement for rsted to acquire full ownership if the project is awarded.

Summary

• Eversource and rsted have jointly submitted a re-bid for the Sunrise Wind project in New York's latest offshore wind solicitation.
• The updated project aims to deliver up to 924 megawatts of clean energy to New York.
• If the re-bid is successful, rsted will acquire Eversource's 50% share, becoming the sole owner, while Eversource will remain contracted for onshore construction.
• rsted will pay Eversource 50% of the purchase price upon closing the sales transaction and the remaining 50% upon completion of onshore construction and other milestones.
• The project is expected to be completed in 2026, contributing to New York's goal of 70% renewable energy by 2030.
• The Sunrise Wind project has secured all major supplier and project labor agreements and has broad bipartisan support in New York.
• If the project is not selected, the existing contract will be cancelled, and the joint venture will remain in place, with both companies assessing their options.

Sentiment

Score: 7

Explanation: The document presents a positive outlook with the re-bid of the Sunrise Wind project and potential for rsted to take full ownership. The project is expected to create jobs and contribute to New York's renewable energy goals. However, there are risks associated with the bid process and the overall offshore wind market.

Positives

• The Sunrise Wind project is expected to deliver up to 924 megawatts of clean energy to New York.
• The project is expected to be completed in 2026, helping New York achieve its renewable energy mandate.
• The project has secured all major supplier and project labor agreements, indicating readiness to commence work.
• The project has broad bipartisan support across New York.
• The project will create hundreds of local union jobs and investments in a statewide supply chain.
• The project includes significant investments in the state's offshore wind workforce and supply chain, including a $200 million award to Haugland Energy Group LLC and an $86 million contract with Riggs Distler & Company, Inc.

Negatives

• If the re-bid is not successful, the existing contract for Sunrise Wind will be cancelled.
• The project is subject to the outcome of the power purchase agreement bid process, with the risk of losing the bid to a competing offer.
• The project is subject to risks and uncertainties that may cause actual results or outcomes to differ materially from those included in the forward-looking statements.

Risks

• The ability to complete the offshore wind investment sale process on the expected timeline or terms is not guaranteed.
• There is a risk that definitive agreements necessary to consummate the transactions may not be reached.
• The outcome of the power purchase agreement bid process for Sunrise Wind is uncertain, with the risk of losing the bid.
• There is a risk of variability in the costs and projected returns of the offshore wind projects and the risk of deterioration of market conditions in the offshore wind industry.
• The project is subject to cyberattacks or breaches, disruptions in the capital markets, changes in economic conditions, and actions of regulatory bodies.
• The project is subject to fluctuations in weather patterns, changes in business conditions, and changes in laws and regulations.

Future Outlook

The document includes forward-looking statements regarding the progress and anticipated timing of the offshore wind investment sale process, the potential terms thereof, participation in and outcome of rebidding in the New York RFP, and plans for building onshore interconnection systems. These statements are subject to risks and uncertainties.

Management Comments

• David Hardy, Group EVP and CEO Americas at rsted, stated that Sunrise Wind is ready-to-build and ready to make more historic investments in New York's offshore wind economy.
• Joe Nolan, Chief Executive Officer and President of Eversource Energy, mentioned that dozens of New Yorkers are already working on the early construction for Sunrise Wind, which would grow into hundreds of new jobs.

Industry Context

This announcement is part of the broader trend of increasing investment in offshore wind energy projects to meet renewable energy targets. The re-bidding of the Sunrise Wind project reflects the competitive nature of the offshore wind industry and the importance of securing power purchase agreements.

Comparison to Industry Standards

• The Sunrise Wind project, with a capacity of 924 MW, is a significant project in the offshore wind sector, comparable to other large-scale projects in development globally.
• The project's focus on local job creation and supply chain development aligns with industry best practices for maximizing the economic benefits of renewable energy projects.
• The use of high-voltage direct current (HVDC) transmission technology is an advanced approach, similar to other leading offshore wind projects.
• The involvement of rsted, a global leader in offshore wind, adds credibility and expertise to the project, similar to other projects where major players are involved.
• The project's timeline for completion in 2026 is consistent with the typical development timelines for large-scale offshore wind projects.

Stakeholder Impact

• Shareholders: The potential sale of Eversource's stake in the project could impact the company's financials.
• Employees: The project is expected to create hundreds of local union jobs.
• Customers: The project aims to deliver clean energy to New York, contributing to the state's renewable energy goals.
• Suppliers: The project includes significant supply chain contracts, benefiting local businesses.
• Creditors: The project's financial structure and potential sale could impact the company's debt profile.

Next Steps

• The project will await the outcome of the New York offshore wind solicitation.
• If the re-bid is successful, rsted will acquire Eversource's 50% share, and Eversource will lead onshore construction.
• Final federal permits are expected this summer.
• If the project is not selected, the joint venture will remain in place, and both companies will assess their options.

Key Dates

Keywords

offshore wind, renewable energy, Sunrise Wind, rsted, Eversource, New York, clean energy, wind project, energy transition, power purchase agreement