- Partnership provides scale resulting in enhanced returns due to synergies in development, construction and operation of the cluster projects
- Offshore site N-3.8 (Nordsee 2) with a capacity of 433 megawatts secured
- Step-in rights for two additional offshore wind leases with a total capacity of 900 megawatts
Toronto, ON (GLOBE NEWSWIRE) - Northland Power Inc. (“Northland” or the “Company”) (TSX: NPI) and RWE Renewables GmbH (FRA: RWE AG) strengthen their position in the German offshore wind market through an agreement to co-develop a cluster of offshore wind projects in the German North Sea with a total gross capacity of 1.3 gigawatts (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.
In addition to its position in the N-3.8 (Nordsee 2) and N-3.5 (Nordsee 3) sites, Northland will also gain access to the N-3.6 (Delta Nordsee) site, which RWE has step-in rights for 100% 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 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 will also 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.”
Sven Utermöhlen, CEO Wind Offshore, RWE Renewables: “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.”
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. The auction for the remaining leases, will be held in 2023. For both sites the joint venture holds step-in rights.
Northland will hold a 49 percent interest in the new joint venture with RWE holding 51 percent. 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.
Northland Power is a global power producer dedicated to helping the clean energy transition by producing electricity from clean renewable resources. Founded in 1987, Northland has a long history of developing, building, owning and operating clean and green power infrastructure assets and is a global leader in offshore wind. In addition, Northland owns and manages a diversified generation mix including onshore renewables, solar and efficient natural gas energy, as well as supplying energy through a regulated utility.
Headquartered in Toronto, Canada, with global offices in eight countries, Northland owns or has an economic interest in 3.2 GW (net 2.8 GW) of operating generating capacity and a significant inventory of early to mid-stage development opportunities encompassing approximately 4 to 5 GW of potential capacity.
Publicly traded since 1997, Northland's common shares, Series 1, Series 2 and Series 3 preferred shares trade on the Toronto Stock Exchange under the symbols NPI, NPI.PR.A, NPI.PR.B and NPI.PR.C, respectively.
RWE is leading the way to a green energy world. With an extensive investment and growth strategy, the company will expand its powerful, green generation capacity to 50 gigawatts internationally by 2030. RWE is investing €50 billion gross for this purpose in this decade. The portfolio is based on offshore and onshore wind, solar, hydrogen, batteries, biomass and gas.
RWE Supply & Trading provides tailored energy solutions for large customers. RWE has locations in the attractive markets of Europe, North America and the Asia-Pacific region. The company is responsibly phasing out nuclear energy and coal. Government-mandated phaseout roadmaps have been defined for both of these energy sources. RWE employs around 19,000 people worldwide and has a clear target: to get to net zero by 2040. On its way there, the company has set itself ambitious targets for all activities that cause greenhouse gas emissions. The Science Based Targets initiative has confirmed that these emission reduction targets are in line with the Paris Agreement. Very much in the spirit of the company’s purpose: Our energy for a sustainable life.
This press release contains certain forward-looking statements including certain future oriented financial information that are provided for the purpose of presenting information about management’s current expectations and plans. Readers are cautioned that such statements may not be appropriate for other purposes. Northland’s actual results could differ materially from those expressed in, or implied by, these forward-looking statements and, accordingly, the events anticipated by the forward-looking statements may or may not transpire or occur. Forward-looking statements include statements that are predictive in nature, depend upon or refer to future events or conditions, or include words such as “expects,” “anticipates,” “plans,” “predicts,” “believes,” “estimates,” “intends,” “targets,” “projects,” “forecasts” or negative versions thereof and other similar expressions or future or conditional verbs such as “may,” “will,” “should,” “would” and “could.” These statements may include, without limitation, statements regarding Northland’s expectations for future expected adjusted EBITDA, Free Cash Flows (and as adjusted) and per share amounts, guidance, the completion of construction, attainment of commercial operations, the potential for future production from project pipelines, cost and output of development projects, litigation claims, plans for raising capital, and the future operations, business, financial condition, financial results, priorities, ongoing objectives, strategies and outlook of Northland and its subsidiaries. These statements are based upon certain material factors or assumptions that were applied in developing the forward-looking statements, including the design specifications of development projects, the provisions of contracts to which Northland or a subsidiary is a party, management’s current plans and its perception of historical trends, current conditions and expected future developments, as well as other factors that are believed to be appropriate in the circumstances. Although these forward-looking statements are based upon management’s current reasonable expectations and assumptions, they are subject to numerous risks and uncertainties. Some of the factors that could cause results or events to differ from current expectations include, but are not limited to, risks associated with revenue contracts, impact of COVID-19 pandemic, Northland’s reliance on the performance of its offshore wind facilities at Gemini, Nordsee One and Deutsche Bucht for approximately 60% of its Adjusted EBITDA and Free Cash Flow, counterparty risks, contractual operating performance, variability of revenue from generating facilities powered by intermittent renewable resources, offshore wind concentration, natural gas and power market risks, operational risks, recovery of utility operating costs, permitting, construction risks, project development risks, acquisition risks, financing risks, interest rate and refinancing risks, liquidity risk, credit rating risk, currency fluctuation risk, variability of cash flow and potential impact on dividends, taxation, natural events, environmental risks, health and worker safety risks, market compliance risk, government regulations and policy risks, utility rate regulation risks, international activities, reliance on information technology, labour relations, reputational risk, insurance risk, risks relating to co-ownership, bribery and corruption risk, legal contingencies, and the other factors described in the “Risks Factors” section of Northland’s 2020 Annual Information Form, which can be found at www.sedar.com under Northland’s profile and on Northland’s website at northlandpower.com. Northland’s actual results could differ materially from those expressed in, or implied by, these forward-looking statements and, accordingly, no assurances can be given that any of the events anticipated by the forward-looking statements will transpire or occur.
The forward-looking statements contained in this release are based on assumptions that were considered reasonable as of the date hereof. Other than as specifically required by law, Northland undertakes no obligation to update any forward-looking statements to reflect events or circumstances after such date or to reflect the occurrence of unanticipated events, whether as a result of new information, future events or results, or otherwise.
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