Danish energy giant set to spend $510m on US rival in bid to expand its North American business
Danish clean energy giant Ørsted has made a major play for the fledgling US offshore wind market with a move to buy rival US developer Deepwater Wind.
Ørsted announced yesterday it is set to pay $510m to acquire 100 per cent of the Rhode Island-based developer, in a bid to beef up its offshore wind platform in the US.
Deepwater Wind brings with it a pipeline of 3.3GW of offshore wind projects, including America's only operational offshore wind farm, the 30MW Block Island array. Ørsted already has a 5.5GW pipeline of offshore wind projects in the US.
Following the deal's completion, which is subject to clearance by the US competition authorities, the two companies' US assets will be merged to create one company under the name Ørsted US Offshore Wind.
"With this transaction we are 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 wind projects in the US, and Ørsted's unparalleled track record in engineering, constructing and operating large-scale offshore wind farms," said Martin Neubert, CEO of offshore wind at Ørsted.
The deal is expected to close by the end of the year, paving the way for 2019 to become a major growth year for the nascent American wind market - particularly as Deepwater Wind has already secured, or is close to securing, subsidy contracts for three projects on the North East coast totalling 810MW.
In a further sign of the potential growth of the US market, late last week the US Department of Energy (DoE) proposed federal funding for the first freshwater offshore wind farm in the US.
Slated for Lake Erie in Ohio, the Icebreaker Wind project is being developed by Norwegian wind developer Fred. The DoE said it could be eligible for subsidy pending an environmental assessment.