Denmark-based renewable energy developer Ørsted has inked a $625 million deal to buy out Eversource Energy’s 50% stake in a federal offshore wind lease area they currently co-own. The deal also covers contracts and partnerships for essential operational assets in the U.S. Northeast.

The deal is expected to close in the third quarter of 2023.

The lease area, ‘Lease 500,’ covers about 187,000 acres of uncontracted seabed and can produce up to 4 GW of power. The deal also includes contracts and leases for key port facilities and other assets in Rhode Island, Connecticut, and New York.

Ørsted will own and operate these assets, as well as the first U.S.-built offshore wind service vessel, built by Edison Chouest in Louisiana and is over halfway done.

The company’s U.S. offshore wind portfolio benefits from Lease 500, which has several advantages over other sites. The site is close to existing Ørsted projects, which reduces construction and operational costs. The site has shallow water depth and high wind speeds, which enhance the performance of the wind turbines. The site is also strategically located about 40 km off Southern New England’s coast, enabling it to serve four markets– Massachusetts, Rhode Island, Connecticut, and New York.

As part of the agreement with Ørsted, Eversource has reached a tax equity agreement with the company for the South Fork Wind project, which is a key step for the project to start delivering clean energy later this year. Eversource will also support the onshore construction of all three projects in the portfolio, ensuring their long-term success and continuity.

In March, Ørsted acquired the 160 MW Garrenleen solar project from solar project developer Terra Solar in Ireland.  Ørsted already operates 360 MW of onshore wind in Ireland.

Earlier, Ørsted announced that it would start the construction of its 471 MW Mockingbird Solar Center in Texas. The project will cover an area of 4,900 acres and is expected to generate enough renewable energy to power more than 80,000 homes annually, making it the largest solar project in Ørsted’s portfolio. The completion of the project is expected in 2024.