Orsted, the Copenhagen-based offshore wind giant, will enter European onshore wind generation with a deal to buy Brookfield Renewables’ Irish and U.K. assets.
The agreement is based on an enterprise valuation of 571 million euros at the end of last year, with the final price subject to adjustments, Orsted said.
Orsted, which has built more offshore wind farms than any other company, began to develop onshore wind projects in the United States in 2018. The acquisition agreement brings Orsted into European onshore wind generation for the first time.
The deal shows competition for renewables projects as European political leaders increasingly push an agenda for carbon-free energy. Seeing the writing on the wall, major European oil and gas producers such as Total, Royal Dutch Shell, Eni and BP have boosted their investments into renewable energy production.
“The European market for onshore wind power is expected to grow significantly in the coming years, and with the acquisition of BRI, we get a strong platform that expands our presence,” Orsted CEO Mads Nipper said in a statement.
Brookfield Renewables Ireland has 389 megawatts (MW) of capacity in operation and under construction, with more than 1 gigawatt (GW) of projects in the development pipeline in Ireland and the U.K. Brookfield’s management team will continue to run the business, which will be integrated into Orsted over time. The transaction is expected to close in the second quarter of 2021.
Orsted, formerly named DONG Energy, divested its oil and gas business in 2017. Its move into European onshore wind generation suggests the company wants to maintain an early mover advantage, as the expanding market for wind production begins to attract increasing levels of investor interest.
Earlier this year, Orsted signed on to a multi-company project to produce renewable hydrogen from offshore wind farms at costs that are competitive with natural gas.