Danish company Ørsted is in the running to become the leading offshore wind energy producer in the U.S. with its purchase of Rhode Island-based Deepwater Wind for $510 million on Monday, Oct. 8. Deepwater Wind was the first to develop an operational wind farm offshore on the East Coast: the Block Island, five-turbine 30-megawatt producer 3.8 miles off the coast of Rhode Island, which was completed in 2016.
Ørsted also acquired a federal offshore lease located 10 miles off Atlantic City in May 2016 from RES America after that company won the bid two months earlier for lease number OCSA0498. The lease is for 160,480 acres on the Continental Shelf off Atlantic and Cape May counties. RES purchased it for $880,715 from the federal Bureau of Energy Management.
On Monday, Ørsted announced it has entered into an agreement with the D.E. Shaw Group to acquire a 100 percent equity interest in Deepwater Wind. “The two companies’ offshore wind assets and organizations will be merged into the leading US offshore wind platform with the most comprehensive geographic coverage and the largest pipeline of development capacity,” according to a company representative.
Besides Block Island, Deepwater Wind’s portfolio includes three offshore wind development projects pending in Rhode Island, Connecticut, Maryland and New York totaling 810 gigawatts of capacity, plus Bureau of Energy Management offshore leases in Massachusetts and Delaware with 2.5 GW potential. Of these 2.5GW, 1.2GW is developed through an equal joint venture with PSEG.
With the lease off Atlantic and Cape May counties, now called the Ocean Wind site, and its potential for 3.5 GW, Ørsted’s current U.S. offshore wind portfolio has a total capacity of approximately 5.5GW.
“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,” said Martin Neubert, CEO of Offshore Wind at Ørsted. “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.”
The transaction is subject to clearance by the U.S. competition authorities. If it is approved, the name of the new organization would be Ørsted US Offshore Wind. Ørsted entered the U.S. market in 2015 and sees the U.S. renewables market as an attractive and strategic growth opportunity.
The Ocean Wind site located off the coast of Atlantic City is in the early stages of development. The company has asked for two extensions to its Site Assessment Plan required by the Bureau of Energy Management, and these were granted. The plan that is on the BOEM site shows two floating and ranging meteorological buoys chained and anchored to the ocean floor, with an anchor sweep of 2.6 acres, and one smaller “metaocean” buoy to ascertain currents. The buoys would be powered by solar and wind with a backup diesel generator and would send data by satellite to the mainland.
— Pat Johnson