Northland Power invests in North Sea offshore wind farms with RWE Innogy
Nordsee Two and Nordsee Three, also being acquired under this agreement, are early stage development projects totaling about 670 MW
Northland Power Inc., Toronto, and RWE Innogy GmbH, Essen, have signed an agreement for Northland to acquire an 85 percent equity stake in three offshore wind projects, consisting of Nordsee One, a 332 MW project currently in advanced development, as well as Nordsee Two and Nordsee Three, which are in early stages of development.
Nordsee Two and Nordsee Three, also being acquired under this agreement, are early stage development projects totaling about 670 MW. They will be developed over the next decade as offshore wind tariffs are extended and the grid infrastructure is made available.
The projects are located 25 miles north of Juist Island in German territorial waters, in an area of about 62 square miles, with shallow water and high wind speeds: ideal conditions for an offshore wind farm. The total estimated project cost of Nordsee One is $1.56 billion and, once operational, it is expected to generate over 1,300 gigawatt hours of electricity per year from 54 wind turbines, enough to meet the needs of 400,000 German households.
Offshore wind development is a key feature of Germany's 'Energiewende' program, the official policy supporting renewable power generation with a stated goal for offshore wind capacity of 6,500 MW of installed capacity by 2020 and 15 GW by 2030.
Nordsee One is well advanced, having received the required permits for the wind farm, and is advancing toward achieving all of the related permit milestones. A tender process for the supply, installation and maintenance of the wind turbines for Nordsee One is ongoing and is expected to be closed soon. All other major supply and construction contracts are nearing completion.
Nordsee One is entitled to a fixed feed-in tariff subsidy for about ten years under the German Renewable Energy Act ("EEG"). A substantial portion of the project returns are earned during the feed-in-tariff period, with the remainder of the planned returns earned from the robust and mature German wholesale electricity market.
The Nordsee One project will continue to be developed and the partners expect to reach a final investment decision and financial close in the first half of 2015, with in-water construction anticipated to begin in 2016. The project is expected to be completed by the end of 2017.