Orsted acquiring Deepwater Wind in $510M deal
Danish wind energy giant Orsted is growing larger with its acquisition of Deepwater Wind, one of its competitors in the United States.
Orsted announced Monday morning that it has agreed to purchase Deepwater Wind for $510 million, a transaction that is expected to close by the end of 2018.
The deal combines two big players in the emerging U.S. market where Orsted is pursuing East Coast projects with a total capacity of 5.5 gigawatts. Deepwater is in the advanced stages of offshore projects in Rhode Island, Connecticut, Maryland and New York totaling 810 megawatts while pursuing additional projects with 2.5 gigawatts of development potential.
Massachusetts officials and utilities this year selected Vineyard Wind over Orsted and Deepwater Wind to build an 800-megawatt wind farm off the Vineyard.
Deepwater Wind operates the only offshore wind installation in the U.S., a 30-megawatt farm off Block Island. Connecticut previously agreed to pursue 200 megawatts of power from Deepwater Wind's Revolution Wind project, and Rhode Island is also pursuing 400 megawatts of wind energy from Revolution Wind.
"With this transaction we're creating the number one offshore wind platform in North America, merging the best of two worlds: Deepwater Wind's longstanding expertise in originating, developing and permitting offshore wind projects in the US, and Orsted's unparalleled track-record in engineering, constructing, and operating large-scale offshore wind farms," Martin Neubert, CEO of Offshore Wind at Orsted, said in a statement. "Today's announcement consolidates Orsted's position as the global market leader in offshore wind with a strong foothold across Europe, North America and Asia-Pacific."
The new organization, Orsted U.S. Offshore Wind, will be represented by a local team headed by CEO Thomas Brostrom and COO Claus Bojle Moller, both of Orsted, and Co-CEO Jeff Grybowski and president and CFO David Hang, both from Deepwater Wind.
Gov. Charlie Baker and Jay Gonzalez, the Democratic nominee for governor, have this year both agreed to an Environmental League of Massachusetts (ELM) Action Fund pledge to ensure delivery of 1,600 megawatts of offshore wind authorized under a 2016 law. Vineyward Wind is expected to deliver 800 megawatts and the pledge commits both candidates in the Nov. 6 election to fulfill the remaining 800 megawatts of offshore wind energy on or before June 2019.
The ELM pledge, exercised with the National Wildlife Federation Action Fund, also commits Baker and Gonzalez to completing a study by May 2019 of an additional 1,600 megawatts of offshore wind power. If that study shows that the additional wind power is economically advantageous, the candidates have agreed to direct the state officials to instruct utilities to begin a solicitation process for the additional offshore wind power no later than 2025.
"This acquisition comes at a pivotal moment in America’s offshore wind story," National Wildlife Federation offshore wind program director Catherine Bowes said Monday. "We know responsibly developed offshore wind power offers a critical solution to climate change, and the first round of U.S projects must be sited and built with wildlife in mind. Deepwater Wind's Block Island Wind Farm set a strong precedent with the development of America's first offshore turbines, and we look forward to continuing to work with Orsted and all offshore wind companies to advance responsibly developed projects for America."
Vineyard Wind, which remains in the permitting phase but plans to start construction in 2019, announced Friday that it has filed with the Massachusetts Energy Facilities Siting Board a host community agreement with the town of Barnstable. Under the agreement, Vineyard Wind is required to pay Barnstable $1.54 million a year in combined property taxes and host community payments and the agreement guarantees a total host community payment of $16 million.
Vineyard Wind is jointly owned by Copenhagen Infrastructure Partners and Avangrid Renewables.
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