RWE is set to acquire the rights to develop three major offshore wind projects off the Norfolk coast, with a planned capacity of 4.2 GW, after yesterday announcing a nearly £1 billion deal with Swedish state energy company Vattenfall .
Located 50-80 km off the east coast of England in the Norfolk Offshore Wind Zone, the three projects – Norfolk Vanguard West, Norfolk Vanguard East and Norfolk Boreas each have 1.4 GW of planned capacity and have been in development for approximately 13 years.
All are now in the late stages of development and have secured seabed rights, network connections, development consent orders and other permits. According to RWE, they are expected to become fully operational this decade.
The Norfolk Vanguard West and East plans are the most advanced and have secured most of the key components. The next milestone is to secure a Contract for Difference (CfD) in the upcoming auction rounds.
However, the Norfolk Boreas program was halted in July after Vattenfall revealed that project costs had risen by as much as 40 percent due to inflationary pressures on material and labor costs, a decision described at the time by industry figures as a “major decision’. wake up call” for the UK offshore wind sector.
As such, RWE’s proposal to buy and develop all three projects marks a major boost for the UK offshore wind industry, as does the government’s hope to boost the country’s total offshore turbine capacity to 50 GW by 2030, compared with about 14 GW now.
The agreed purchase price for Vattenfall’s portfolio is based on an enterprise value of £963 million, the majority of which was spent to date, the German energy giant said.
Once operational, the three offshore wind farms together are expected to provide enough electricity to meet the needs of four million average UK households, making it one of the largest offshore wind farms in the world.
Tom Glover, chairman of RWE in Britain, praised Britain’s continued position as one of the company’s key core markets globally.
“The timely and efficient deployment of offshore wind energy is essential to ensuring Britain’s domestic energy security and achieving our net zero targets,” he said.
“We are very pleased with the UK Government’s recent decisions on future offshore wind auctions, which give us the confidence to invest and represent a positive step in maximizing the UK’s clean energy potential, ensuring sustainable and lowest prices for consumers and creating good quality jobs.”
The transaction is subject to regulatory approval and sign-off by The Crown Estate, which is expected to occur in the first quarter of 2024. Until then, Vattenfall will continue to develop the Vanguard East and Vanguard West projects, the companies said.
Vattenfall confirmed the deal and said the sale of the three projects would increase its ability to invest in fossil-free projects to better align with its “overall portfolio and risk appetite”.
It comes after economic headwinds saw the company announce impairment charges of 5.5 billion Swedish crowns – around £415 million – earlier this year, which Vattenfall said would be reversed following the sale of its Norfolk offshore wind projects to RWE.
However, Vattenfall stressed that it remains committed to the UK energy market, where it has a portfolio of 1.1 GW of installed offshore and onshore wind capacity, including the 798 MW Muir Mhor floating offshore wind farm currently under development for the east coast of Scotland in collaboration with Fred. . Olsen Seawind.
The company also owns a pipeline of 500 MW onshore wind and heat networks under construction in three major UK cities.
Anna Borg, CEO of Vattenfall AB, said the deal with RWE is “great news for Britain’s energy security”, which would guarantee the continued development of the three offshore wind projects, securing jobs and investment in the country.
“The Norfolk Offshore Wind Zone is incredibly important to the energy transition and achieving net zero,” she said.
“Both the UK and offshore markets remain attractive in the long term and we will focus our offshore investments on projects that match our current risk appetite, whilst continuing to operate and grow our existing fleet of assets.”
The announcement follows yesterday’s news that Ørsted has made the final investment decision to proceed with the 2.9 GW Hornsea 3 offshore wind project in the North Sea, which is expected to be the largest in the world once completed in 2027.
The deal comes as RWE plans to invest €55 billion between 2024 and 2030 to expand its green portfolio to more than 65 GW. The company already operates ten offshore wind farms in the UK and is developing nine projects with a combined capacity of approximately 9.8 GW, including those in the Norfolk Offshore Wind Zone and the 1.4 GW Sofia offshore wind project in the North Sea.
RenewableUK’s CEO Dan McGrail said RWE’s acquisition of the three “huge” Norfolk projects, combined with Ørsted’s announcement and the latest UK wind power generation record yesterday, together represent a “huge vote of confidence” in the British offshore wind industry.
“These projects will bring billions in private investment to Britain, boosting our energy security and providing consumers with cheap energy for years to come,” he said.
“This shows that Britain is regaining its position as the leading market for offshore wind investment, moving beyond the disappointment of this year’s CfD auction,” McGrail added.
In further offshore wind news, TotalEnergies today announced that it has signed an agreement to sell a 25.5 percent stake in the Seagreen offshore wind farm off the coast of Scotland to Thai national oil and gas company PTTEP in a deal worth of $689 million. 522m).
The transaction, which values Seagreen at $4.3 billion, will see both PTTEP and TotalEnergies own 25.5 percent of the project, in addition to SSE Renewables’ existing 49 percent stake.
Seagreen, which has been operational since October, is the deepest fixed-bottom wind farm in the world. It has a total power generation capacity of more than 1 GW from its 114 turbines, capable of powering more than 1.6 million average households.
“After a long collaboration in the field of gas production in Thailand, we are pleased to welcome PTTEP as a new shareholder in the Seagreen offshore wind farm next to SSE, a first in our collaboration with PTTEP in the field of renewable energy,” said Patrick Pouyanné , chairman and CEO of TotalEnergies .
Do you want to understand what is going on at the intersection of sustainability? Checking out BusinessGreen Intelligence – the most important information for professionals focused on the UK’s green economy
#RWE #completes #acquisition #Vattenfalls #Norfolk #offshore #wind #portfolio #million #deal