- Partnership provides scale resulting in enhanced returns due to synergies in development, construction and operation of the cluster projects
- Offshore site N-3.8 (Nordsee 2) with a capacity of 433 megawatts secured
- Step-in rights for two additional offshore wind leases with a total capacity of 900 megawatts
Northland Power Inc. (TSX: NPI) and RWE Renewables GmbH strengthen their position in the German offshore wind market through an agreement to co-develop a cluster of offshore wind projects in the German North Sea with a total gross capacity of 1.3 gigawatts (GW). The partners signed an agreement to establish a joint venture company through which they plan to jointly develop, construct and operate the cluster of three offshore wind projects. The cluster will include the 433 MW N-3.8 (Nordsee 2) site, the 420 MW N-3.5 (Nordsee 3) site and the 480 MW N-3.6 (Delta Nordsee) site.
In addition to its position in the N-3.8 (Nordsee 2) and N-3.5 (Nordsee 3) sites, Northland will also gain access to the N-3.6 (Delta Nordsee) site, which RWE has step-in rights for 100% of the lease, while at the same time, RWE will increase its position in the N-3.8 (Nordsee 2) and N-3.5 (Nordsee 3) sites. The size and scale of the cluster formation are expected to allow the partnership to unlock synergies. Specifically, the realization of synergies in development and construction costs and operating costs are expected to result in enhanced returns for the projects. Northland will also benefit from enhanced offtake opportunities by forming the partnership and the cluster to secure offtake agreements for the projects once complete. The cluster will be close to the existing 332 MW Nordsee One wind facility in which Northland and RWE are partners.
“The formation of the cluster aligns with our offshore wind ambitions and strategy of growing our position as a global leader in offshore wind,” said Mike Crawley, President and Chief Executive Officer of Northland. “We are proud to enhance our partnership with RWE to form the cluster to further strengthen our position in the North Sea. This cluster will provide us with significant size and scale and allows us to support the decarbonization efforts in Germany.”
Sven Utermöhlen, CEO Wind Offshore, RWE Renewables: “Germany has set itself ambitious climate targets, thereby establishing a significant growth potential for renewable energies. Offshore wind power plays a central role in this and is indispensable for supporting the decarbonization of industry in particular. RWE is making its contribution to this and is significantly stepping up the pace here. This includes the collaborative delivery of the 1.3 GW offshore cluster with Northland Power, through which we can achieve considerable synergies to deploy at our new wind farms, while at the same time actively supporting the energy transition in our home market Germany.”
Northland and RWE hold step-in rights for N-3.8 (Nordsee 2) and N-3.5 (Nordsee 3), while RWE holds step-in rights for the N-3.6 (Delta Nordsee) lease. In early November, the partners exercised their step-in rights for N-3.8 (Nordsee 2), allowing them to match the awarded bid in the auction and retain the lease. The auction for the remaining leases will be held in 2023. For both sites, the joint venture holds step-in rights.
Northland will hold a 49 percent interest in the new joint venture, with RWE holding 51 percent. The projects will be developed and managed on a joint basis by both parties and are expected to achieve commercial operations between 2026 and 2028.