Northland Power Inc. (“Northland” or the “company”) announces the sale of its full 49 per cent ownership stake in the Nordseecluster offshore wind portfolio (NSC) to its partner on the portfolio, RWE Offshore Wind GmbH (RWE). The sale provides RWE with 100 per cent ownership of the projects for a cash consideration of approximately EUR 35 million, which represents a premium to Northland’s costs incurred to date. This transaction will transfer the assets and liabilities, and all committed contractual obligations of Northland in relation to NSC, to RWE. NSC’s total gross capacity comprises 1,560 megawatts (MW) of offshore wind projects including: Nordsee Two, Nordsee Three, Delta Nordsee and Godewind.
“Northland is constantly evaluating its 19-gigawatt (GW) portfolio and prioritizes projects that are strategically and financially consistent with its investment approach. Evaluation of the NSC in the current environment is leading to higher expected costs for the project, that are only partially being offset by higher expected revenue offtake. As a result, the project no longer meets Northland’s investment criteria,” said Mike Crawley, President and CEO, Northland.
The sale of the NSC is not expected to impact Northland’s growth trajectory, as the company has a large development pipeline of renewable projects that are expected to deliver material growth in capacity and Adjusted EBITDA by 2030.
“Offshore wind is a focal point of our strategy and with growth in offshore wind set to outpace all other renewables, Northland’s leading position in offshore wind positions the Company to be a significant player in this segment through the decade. I want to acknowledge and thank the employees involved in the development of these projects for their contributions and efforts to Northland’s success,” added Mr. Crawley.
Developing, constructing and operating offshore wind facilities is an important part of Northland’s growth strategy. The company expects that significant increases to its renewable capacity will come from offshore wind projects and will drive value and growth over the next decade.
Europe and Germany remain important markets for Northland as the company continues to look to support development of renewable energy to achieve their decarbonization goals.
Northland has a 60 per cent interest in the 600 MW Gemini project in the Netherlands which achieved commercial operations in 2017, while in Germany, the Company has an 85 per cent interest in the 332 MW Nordsee One project, which achieved commercial operations in 2018, and 100 per cent interest in the 252 MW Deutsche Bucht project, which achieved commercial operations in 2020.
In Poland, Northland is developing the Baltic Power offshore wind project, which it has a 50 per cent interest and is expected to reach financial close in 2023 with full commercial operations in 2026.
In Scotland, Northland’s efforts are focused on developing its two ScotWind projects, Spiorad na Mara and Havbredey, which it has a 75.5 per cent interest. The projects encompass 2.3 GW of fixed and floating foundation projects expected to reach commercial operations in late 2029/2030 for the fixed foundation project, and early 2030s for the floating foundation project.
Globally, the company’s current priority is to develop and achieve financial close for two significant offshore wind projects in 2023, the 1 GW Hai Long project in Taiwan and the 1.2 GW Baltic Power project in Poland.
The company’s pipeline includes 19 GW of offshore and onshore renewable projects in Canada, US, Europe, Asia, and Latin America.