Toronto-headquartered Northland Power Inc. has signed a definitive agreement with a subsidiary of Highland Group Holdings Ltd. to acquire 100% of Deutsche Bucht (DeBu), a 252 MW offshore wind project currently in advanced development off the coast of Germany.
DeBu, Northland’s third offshore wind project, is located 95 kilometers northwest of the island of Borkum in the German Exclusive Economic Zone and 77 kilometers from Northland’s other German offshore wind project, Nordsee One, in which the company has an 85% equity stake. Northland also holds a 60% equity stake in the 600 MW Gemini offshore wind farm.
The total estimated project cost of DeBu is approximately EUR 1.2 billion (approximately C$1.8 billion). Once operational, the project is expected to generate over 1,000 GWh of electricity per year.
DeBu is entitled to receive a fixed feed-in tariff subsidy for approximately 13 years under the German Renewable Energy Act. This equates to approximately EUR 184/MWh for 8 years and EUR 149/MWh for the remainder. The majority of the project returns are expected to be earned during the 13-year feed-in tariff period, and the remainder are expected to be earned in the later years from the German wholesale electricity market.
Closing of the acquisition is subject to clearing certain conditions, which the parties will work to complete over the next several months. Northland expects construction to begin shortly after the financial close of the deal and project completion to take place by the end of 2019. DeBu will be connected to the 800 MW BorWin Beta offshore converter station, which has already been constructed.
“We are pleased to add a third solid and robust offshore wind project to Northland’s portfolio,” says John Brace, CEO of Northland Power. “Continued growth in the thriving offshore wind sector is an important component of Northland’s strategic development approach. DeBu will support our commitment to deliver long-term value to shareholders while aiding the global transition to clean and green energy sources.”