Northland Power acquires majority equity stake in North Sea offshore wind farms from RWE Innogy
Northland Power Inc. and RWE Innogy GmbH, Essen, have signed an agreement for Northland to acquire an 85% equity stake in three offshore wind projects in Germany, consisting of Nordsee One, a 332 MW project currently in advanced development, as well as Nordsee Two and Nordsee Three, which are in early stages of development.
Nordsee Two and Nordsee Three, also being acquired under this agreement, are early stage development projects totalling approximately 670 MW. They will be developed over the next decade as offshore wind tariffs are extended and the grid infrastructure is made available.
The projects are located 40 kilometres north of Juist Island in German territorial waters, in an area of approximately 100 square kilometres, with shallow water and high wind speeds: ideal conditions for an offshore wind farm. The total estimated project cost of Nordsee One is €1.2 billion (US$1.55 billion) and, once operational, it is expected to generate over 1,300 gigawatt hours of electricity per year from 54 wind turbines.
Nordsee One is entitled to a fixed feed-in tariff subsidy for approximately ten years under the German Renewable Energy Act (EEG). A substantial portion of the project returns are earned during the feed-in-tariff period, with the remainder of the planned returns earned from the robust and mature German wholesale electricity market.
The Nordsee One project will continue to be developed and the partners expect to reach a final investment decision and financial close in the first half of 2015, with in-water construction anticipated to begin in 2016. The project is expected to be completed by the end of 2017.
Sean Durfy, President and Chief Development Officer of Northland Power, stated:
We are excited to announce this next stage of Northland’s offshore wind development program. The Nordsee One project is well advanced and increases Northland’s offshore wind portfolio to 642 MW {net to Northland}, with further growth potential in subsequent phases. We are very pleased to have partnered with a world class utility in RWE, who will provide expertise and manpower to support the development and construction of Nordsee One alongside Northland.
Hans Bünting, Chief Executive Officer of RWE Innogy, commented:
As part of RWE Innogy’s capital light strategy going forward, we are going to share the capital required for offshore-projects through partnerships. Nordsee One is another good example illustrating this business model as it allows us to realize large-scale projects by bringing in strong partners. We will continue to seek partnerships for further attractive projects.
Offshore wind development is a key feature of Germany’s 'Energiewende' program, the official policy supporting renewable power generation with a stated goal for offshore wind capacity of 6,500 MW of installed capacity by 2020 and 15 GW by 2030.
