Northland Power and RWE Reforge Step-In Pact Offshore Germany
Northland Power Inc. and RWE Renewables GmbH have agreed to co-develop a cluster of offshore wind projects in the German North Sea with a total gross capacity of 1.3 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.
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.
Northland and RWE Renewables had previously established two special purpose companies, Nordsee Two GmbH and Nordsee Three GmbH, for the development of the Nordsee 2 and Nordsee 3 projects.
Northland currently holds an 85 per cent share in the companies, and RWE Renewables controls the remaining 15 per cent.
With the new agreement in place, Northland will hold a 49 per cent interest in the new joint venture, with RWE holding 51 per cent.
Northland will gain access to the N-3.6 (Delta Nordsee) site, for which RWE has step-in rights for 100 per cent 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 projects will be developed and managed on a joint basis by both parties and are expected to achieve commercial operations between 2026 and 2028.
The auction for the Nordsee 3 and Delta Nordsee leases will be held in 2023.
Sven Utermöhlen, CEO Wind Offshore, RWE Renewables, said: ”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.”
The size and scale from the formation of the cluster is expected to allow the partnership to unlock synergies.
Specifically, the realization of synergies in development and construction costs, as well as operating costs, are expected to result in enhanced returns for the projects.
Northland also expects to benefit from enhanced offtake opportunities through the formation of the partnership and the cluster to secure offtake agreements for the projects, once complete. The cluster will be in close proximity to the existing 332 MW Nordsee One wind facility in which Northland and RWE are partners already.
”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.”