Ørsted and PGE Polska Grupa Energetyczna S.A. (PGE) have signed an agreement to form a 50/50 joint venture for the development, construction and operation of two offshore wind projects in the Baltic Sea with a total potential capacity of up to 2.5 GW.
Ørsted will subscribe for new shares representing 50% of the total share capital in PGE’s two offshore wind projects, Elektrownia Wiatrowa Baltica-3 sp. z o.o. (Baltica 3) and Elektrownia Wiatrowa Baltica-2 sp z o.o. (Baltica 2). Baltica 3 has a capacity of approximately 1 GW; Baltica 2 has a capacity of approximately 1.5 GW. The subscription price for the newly issued shares in Baltica 2 and 3 will amount to a total of approximately $177 million.
“Offshore wind energy is a great opportunity for the Polish economy and Polish entrepreneurs,” says Wojciech Dąbrowski, president of the management board of PGE. “It is estimated that over 100 domestic entities can be successfully involved in the preparation, construction and operation of wind farms in the Polish part of the Baltic Sea. The Polish Ministry of Climate and Environment estimates the potential offshore energy capacity in the Baltic Sea to be approximately 11 GW by 2040. We aim to install at least 6.5 GW of offshore capacity by 2040.”
Both projects are eligible to be included in Poland’s 2021 offshore wind allocation round, where a total of 5.9 GW is expected to be awarded. Baltica 3 is the most advanced of the two projects and could become operational in 2026.
As a part of the agreement, Ørsted and PGE have agreed to establish a framework that enables both parties to effectively integrate and leverage strengths and expertise from both sides. The joint venture says the combination of Ørsted’s offshore wind expertise with PGE’s Polish power market experience will form a partnership well-positioned to deliver the largest portfolio of offshore wind projects in the 2021 allocation round. As a part of the joint venture, Ørsted will significantly expand its on-the-ground presence in Poland.
Subject to regulatory approval, the transaction is expected to close in Q1.