Orsted has signed an agreement with D. E. Shaw Group to buy the Deepwater offshore wind energy project in the USA.
Orsted will buy 100 per cent of the equity in Deepwater Wind for $510 million. The two companies’ offshore wind assets and organizations will be merged into a single entity “with the most comprehensive geographic coverage and the largest pipeline of development capacity,” Orsted said. It added: “We expect the acquisition to deliver a healthy value creation spread on top of our cost of capital, with additional significant strategic upside.”
Deepwater Wind operates the 30 MW Block Island project, the only operable offshore wind farm in the USA, and also has three development projects in Rhode Island, Connecticut, Maryland and New York totaling 810 MW of capacity with long-term revenue contracts in place or pending finalisation.
Deepwater also owns around 2.5 GW of offshore wind development potential across three well-sited BOEM lease areas in Massachusetts and Delaware. Of these 2.5 GW, 1.2 GW is developed through an equal joint venture with PSEG, a New Jersey utility.
Orsted’s current US offshore wind portfolio has a total capacity of approximately 5.5 GW and includes development rights for up to 2 GW at the Bay State Wind site off the coast of Massachusetts owned in a joint venture with Eversource, and development rights for up to 3.5 GW at the Ocean Wind site off the coast of New Jersey.
In Virginia, Ørsted will be constructing two 6 MW wind turbine positions for phase one of Dominion Energy’s Coastal Virginia Offshore Wind Project. Ørsted has exclusive rights with Dominion Energy to discuss the potential development of up to 2 GW of offshore wind capacity.
Martin Neubert, CEO of Offshore Wind at Ørsted, said: “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 Ørsted’s unparalleled track-record in engineering, constructing, and operating large-scale offshore wind farms.
“Today’s announcement consolidates Ørsted’s position as the global market leader in offshore wind with a strong foothold across Europe, North America and Asia-Pacific.”