Ørsted has entered into an agreement with the D.E. Shaw Group to acquire a 100% equity interest in Rhode Island-based Deepwater Wind at a purchase price of USD 510 million. The two companies’ offshore wind assets and organizations will be merged into one, leading U.S. offshore wind platforms with the most comprehensive geographic coverage and the largest pipeline of development capacity.
“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 U.S., and Ørsted’s unparalleled track-record in engineering, constructing and operating large-scale offshore wind farms,” explained Martin Neubert, CEO of Offshore Wind at Ørsted. “The announcement consolidates Ørsted’s position as the global market leader in offshore wind with a strong foothold across Europe, North America, and Asia-Pacific.”
Deepwater Wind, a U.S. offshore wind developer, has built an attractive and geographically diverse portfolio of projects along the U.S. East Coast. Deepwater Wind’s portfolio has a total potential capacity of about 3.3 GW comprising of:
- Block Island (30 MW), the only operational offshore wind farm in the U.S.
- Three offshore wind development projects in Rhode Island, Connecticut, Maryland and New York totaling 810 MW of capacity with long-term revenue contracts in place or pending finalization.
- Approximately 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 leading New Jersey utility.
Ørsted’s current U.S. offshore wind portfolio has a total capacity of approx. 5.5 GW comprising:
- 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.
- 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 2GW of offshore wind capacity.
“Deepwater Wind has done a fantastic job as a first-mover in U.S. offshore wind, and I look forward to joining and integrating the two U.S. organizations,” said Thomas Brostrøm, CEO of Ørsted U.S. Offshore Wind and President of Ørsted North America. “We have exciting times ahead of us delivering large-scale clean energy projects to households and businesses along the Eastern Seaboard. Ørsted will maintain a strong presence in Massachusetts and Rhode Island and will, of course honor the local commitments associated with Deepwater Wind’s projects along the East Coast.“
With the combined organization and asset portfolio, Ørsted will be able to deliver clean energy to the seven states on the U.S. East Coast that have already committed to building in total more than 10 GW of offshore wind capacity by 2030 (source: Bloomberg New Energy Finance).
Ørsted expects the acquisition to deliver a healthy value creation spread on top of our cost of capital, with additional significant strategic upside.
“I am deeply grateful to the many people who have made Deepwater Wind so successful and I’m excited to see what the largest and most innovative offshore wind company in the U.S. can do when it’s merged with the largest and most successful offshore wind company in the world,” said Bryan R. Martin, Managing Director of D. E. Shaw & Co. “I’m truly proud that offshore wind’s global leader can now author the next chapter for Deepwater Wind. Together – they’ll continue to make history.”
After closing of the transaction, the name of the new organization will be Ørsted U.S. Offshore Wind. The new organization will be represented by a local management team headed by Ørsted U.S. Offshore Wind CEO Thomas Brostrøm, Co-CEO Jeff Grybowski, President and CFO David Hang both from the Deepwater Wind team, and COO Claus Bøjle Møller from the Ørsted team.
“Ørsted is one of the world’s great clean energy companies and real pioneers in the offshore wind sector,” said Jeffrey Grybowski, CEO of Deepwater Wind. “We could not be more pleased with this combination, which will bring together two great teams to realize an enormous clean energy resource for coastal populations in the U.S.”
The transaction is subject to clearance by the U.S. competition authorities and is expected to close by end of 2018.
Filed Under: News, Offshore wind, Projects