Brookfield Expands Renewable Portfolio with UK Wind Farms
Brookfield Expands Its Renewable Energy Footprint
In a significant move for the renewable energy sector, Brookfield has entered into an agreement to acquire a 12.45% minority stake in Ørsted's operational offshore wind farms located in the U.K. This acquisition involves four key projects: Hornsea 1, Hornsea 2, Walney Extension, and Burbo Bank Extension. Collectively, these assets hold a remarkable capacity of approximately 3.5 GW.
Details of the Transaction
This partnership between Ørsted and Brookfield represents a transaction with an enterprise value of about $2.3 billion, with $570 million attributed to Brookfield Renewable. The deal is set to be finalized by the end of the year, pending the necessary regulatory approvals.
Strategic Partnership Benefits
With this collaboration, Brookfield taps into Ørsted's extensive experience as a leader in the offshore wind sector. This investment not only enhances Brookfield’s renewable portfolio but also aligns perfectly with its strategic focus on sustainable energy solutions. The partnership signifies a meaningful step in Brookfield’s continuous investment in the offshore wind energy domain, complementing their existing solar and onshore wind portfolios.
Ørsted's Continued Control
Despite the stake sale, Ørsted retains a 37.55% ownership interest in these wind farms, ensuring that they maintain a similar level of operational control and governance as before. Ørsted will undertake the operational responsibilities of the wind farms, adhering to existing service agreements, and the projects will continue to operate under long-term inflation-linked contracts.
Leaders in Renewable Energy
Ørsted's CEO, Mads Nipper, expressed enthusiasm regarding the partnership, emphasizing Brookfield’s strong standing as a renewable energy investor. This deal is celebrated as a significant milestone in Ørsted’s farm-down program, which supports the company’s reinvestment strategy in new renewable energy assets.
Investment in Clean Energy Solutions
Connor Teskey, CEO of Brookfield Renewable, highlighted the importance of this partnership in providing renewable energy that supports the UK’s decarbonization goals. As the demand for sustainable renewable energy surges, this investment becomes crucial. It is Brookfield's inaugural foray into the U.K. offshore wind sector and reflects their commitment to expanding their clean energy footprint.
Future Growth and Opportunities
The agreement includes a call option, allowing Ørsted the opportunity to repurchase the assets from Brookfield within a defined timeframe after the transaction closes. This strategic option underscores the partnership's flexibility and long-term vision.
Ørsted's Leadership in Offshore Wind
As the foremost developer in the U.K. offshore wind market, Ørsted currently manages over 5 GW of offshore wind capacity, with a robust pipeline of another 5 GW in various stages of development, which includes notable projects like Hornsea 3 and Hornsea 4 that have already secured contracts for difference (CfDs).
Global Renewable Energy Impact
Globally, Ørsted has successfully installed 15.4 GW of renewable energy across various platforms, including offshore and onshore wind projects as well as solar and battery storage solutions, while an additional 7.7 GW is currently under development.
About Ørsted and Brookfield Asset Management
Ørsted is committed to pioneering in the green energy landscape. They engage in the development, construction, and operation of diverse renewable energy solutions, including offshore and onshore wind farms, solar projects, and energy storage systems. Recognized for their outstanding climate action leadership, Ørsted continues to strive toward a world powered entirely by green energy.
Brookfield Asset Management is a global leader in alternative asset management, managing approximately $1 trillion in assets. They focus on real assets and essential service businesses, offering several investment products for diverse investor groups, including pension funds, endowments, and sovereign wealth funds. Brookfield is also the parent of Brookfield Renewable Partners, which is recognized as one of the world's largest renewable energy platforms.
Contacting the Companies
For more information regarding this partnership:
Ørsted Media Contact
Tom Christiansen
Phone: +45 99 55 60 17
Email: tomlc@orsted.com
Brookfield Media Contact
Simon Maine
Phone: +44 739 890 9278
Email: simon.maine@brookfield.com
Frequently Asked Questions
What is the significance of Brookfield’s acquisition?
This acquisition allows Brookfield to enhance its renewable energy portfolio and enter the U.K. offshore wind market, supporting its commitment to sustainability.
How much capacity do the acquired wind farms have?
The combined capacity of the four wind farms is approximately 3.5 GW, contributing significantly to renewable energy supply in the U.K.
What percentage stake will Brookfield hold?
Brookfield will hold a 12.45% minority stake in the operational offshore wind farms acquired from Ørsted.
When is the transaction expected to close?
The transaction is anticipated to close by the end of the year, contingent upon standard regulatory approvals.
Who oversees the operations of the wind farms?
Ørsted will continue to manage the operations and maintenance of the wind farms as per existing agreements.
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