Shell Sells Position in U.S. SouthCoast Offshore Wind JV to Partner

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21-Mar-2024

 

The realignment in the offshore wind sector continues with Shell reporting that it is honing its portfolio. In the latest move, Shell New Energies exited its 50 percent stake in SouthCoast Wind Energy which is in the permitting process for a 2.4 GW wind farm to be located off the coast of Massachusetts. It is the latest step seeing the energy giant reduce its participation in wind energy.

SouthCoast Wind was formed as a 50-50 joint venture in 2018 to develop offshore wind projects with its first lease for a site 30 miles south of Martha’s Vineyard and 23 miles south of Nantucket. The company is a partnership with Ocean Winds North America, which in turn is a partnership between EDP Renewables and ENGIE. When EDPR and ENGIE combined their offshore wind assets and project pipeline to create Ocean Winds in 2019, the company had a total of 1.5 GW under construction and 4.0 GW under development. In addition to SouthCoast Wind, Ocean Winds has Bluepoint Wind in the New York Bight and recently won the lease for Golden State Wind in the first auction for sites offshore from California.

The SouthCoast Wind project is still in the permitting stage with Rhode Island conducting hearings last month. The first phase of the project which would deliver approximately 1.2 GW via an electric grid connection in Massachusetts is targeted for the late 2020s. SouthCoast Wind still developing plans for the second phase of the project.

Shell reports it closed on the sale of its 50 percent interest of SouthCoast Wind to Ocean Winds. No valuation was announced for the shares. Ocean Winds now has 100 percent ownership of SouthCoast Wind, which was formerly known as Mayflower Wind.

“In-line with our Powering Progress strategy, Shell continues to hone our portfolio of renewable generation projects in key markets where we have an advantaged position,” said Glenn Wright, Senior Vice President of Shell Energy Americas. “We are grateful to Ocean Winds for their years of partnership within this venture, and continue to seek opportunities to provide more energy, with fewer emissions.”

The sale of the asset in the United States follows a similar strategy Shell is deploying globally. Last month the energy giant sold its position in a company working on the development of a wind farm in South Korea. Shell has also exited projects including in September 2022 two planned Irish wind farms. After acquiring French floating wind specialist Eolfi in 2019, Shell was reported in May 2023 preparing to sell the company after Wael Sawan became CEO and said Shell would be focusing on creating greater value for shareholders.

In addition to positions in wind energy in the UK and Norway, Shell is also a partner in New Jersey’s Atlantic Shores Offshore Wind with a 50 percent position. They are working in partnership with EDF Renewables North America for that wind farm project which calls for 1.5 GW of capacity. It is a more advanced project as last week the Bureau of Ocean Energy Management reported it is beginning the environmental review for the proposal.

Shell joins other majors which are also rearranging their positions in offshore wind energy. BP and Equinor ended their partnership splitting their U.S. wind portfolio while U.S. generation company Eversource is selling its project including a deal with partner Ørsted and another deal with private equity investors. The private equity sector is showing an increased interest in offshore wind as the sector matures and the projects have moved closer to construction completing the drawn-out permitting and approval process.
 

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