Danish Offshore Wind Giant Orsted Makes Big U.S. Move
Orsted, the Danish firm considered a world leader in offshore wind development, signaled big potential for U.S. market growth with its announced intention on Oct. 8 to buy Deepwater Wind, which has built America’s only operating offshore wind farm, for $510 million.
The deal comes at a time when momentum for developing clean energy is strong and there is clear demand acceleration, Orsted CEO Henrik Poulsen told analysts in a conference call.
Providence, R.I.-based Deepwater Wind, which built a 30-MW facility off Rhode Island that came online in 2016, has been owned by hedge fund D.E. Shaw & Co. for more than a decade.
The new merged firm, when the deal is set to complete later this year, will be called Orsted U.S. Offshore Wind.
“We can now say that the cost of green energy is fully competitive with ‘black’ energy,” said Poulsen, who expects an expanded annual build-out of offshore wind projects.
Orsted, which entered the U.S. market in 2015 based out of Boston, sees value created by its larger engineering, procurement and construction capability that will cut costs and have the next projects built by 2022 and 2023.
Deepwater Wind brings solid expertise in negotiating permits and power purchase agreements, observers say. It won key recent contracts in Massachusetts and Rhode Island, for which Orsted was an unsuccessful bidder.
Looking for quick answers on construction and engineering topics?
Try Ask ENR, our new smart AI search tool.
Ask ENR →
Deepwater Wind also is developing projects in Connecticut, Maryland and New York. Its projects total 810 MW of capacity with long-term revenue contracts in place or pending final approval. It also has about 2.5 GW of development potential at three federal lease areas off the coast of Massachusetts and Delaware.
Orsted’s current U.S. portfolio has a potential capacity of 5.5 GW off the coast of Massachusetts, owned in a joint venture with New England utility Eversource, and rights for up to 3.5 GW off the coast of New Jersey, with New Jersey’s PSEG. It will build two 6-MW turbines off the coast of Virginia as well, and it has exclusive rights to discuss potential development of up to 2 GW of capacity.
The merged company will have co-CEOs: Thomas Brostrom, now president of Orsted North America, and Jeffrey Grybowski, CEO of Deepwater Wind.
David Hang from Deepwater Wind will be president and CFO and Claus Bojle Moller from Orsted will be COO.
