Public Service Enterprise Group (PSEG) will divest its 25% stake in the project to Ørsted, who will own 100% of the wind farm post-deal completion. Ørsted will proceed with development activities while PSEG will support onshore infrastructure construction. PSEG stated that its exit will allow for the entry of a “better positioned” tax equity investor in the project, and reiterated its commitment to offshore wind energy in the US. The deal marks the first complete investor exit from an offshore wind project in the continental United States.
As per Enerdatics’ research, PSEG was evaluating its exit from the project since Q3 2022, primarily due to the project’s involvement in a patent dispute between GE Renewable Energy and Siemens Gamesa. The dispute related to the Haliade-X wind turbines, which Siemens claimed GE had infringed on. In Sep’22, a district judge imposed a permanent injunction on imports, sales, and installations of the Haliade-X turbine in the US, after finding that it infringed a Siemens Gamesa patent. However, Judge Young permitted GE to continue making and operating the turbines for existing projects off the coasts of Massachusetts and New Jersey, with royalty payments made to Siemens Gamesa to the tune of $30,000/MW. Additionally, the judge ruled that GE could "design around" the patent in the future.
Located 15 miles offshore, Ocean Winds 1 is New jersey’s first utility-scale offshore wind project. Ørsted had submitted a bid to the New Jersey Board of Public Utilities to build the project in partnership with PSEG, in Dec’18. The companies secured approval for the project in Jun’19, with PSEG to provide energy management services to the project while simultaneously retaining the right to become an equity investor. The asset is expected to generate its first power in late 2024.
The above analysis is proprietary to Enerdatics’ energy analytics team, based on the current understanding of the available data. The information is subject to change and should not be taken to constitute professional advice or a recommendation.
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