Danish utility and world leader in offshore wind energy Ørsted is selling a minority stake in the London Array offshore wind farm as part of its offshore strategy.
Ørsted is also divesting its shares in the transmission assets of the Hornsea 2 offshore wind farm, thereby generating extensive revenues. Ørsted plans to expand its renewable generation capacity to around 50,000 MW (50 GW) by 2030, requiring capital in the region of DKK 475 billion (around EUR 63.7 billion). Ørsted intends to generate part of the capital through sales at existing projects (farmdowns).
Ørsted sells remaining 25 percent stake in London Array
Ørsted has signed an agreement with funds managed by Schroders Greencoat, a global asset manager specializing in renewable energy, to sell its remaining 25 percent minority stake in the London Array offshore wind farm in the United Kingdom. The total value of the transaction is GBP 717 million (approximately EUR 0.83 billion).
The London Array wind farm has a total installed capacity of 630 MW and was commissioned in 2013. Ørsted originally owned 50 percent of the project and initially sold 25 percent of London Array to CDPQ in 2014. Ørsted expects the transaction of the plant, which Ørsted considers non-strategic due to its minority stake, to close by the end of July 2023.
Ørsted said it remains the largest player in offshore wind in the U.K. after the stake sale, where it operates more than 5 GW of capacity and has a development pipeline that includes the 2.8 GW Hornsea 3 wind farm, the largest offshore wind farm in the world, and the Hornsea 4 project, which was approved in mid-July.
“We’re very pleased to have found a strong new owner for our remaining minority interest in London Array. We continue to see significant appetite for offshore wind as an asset class, and with this divestment, we continue our unrivalled track record of efficiently recycling capital to help fund our DKK 475 billion investment programme towards 2030,” Ørsted CFO Daniel Lerup said of the transaction. Ørsted remains committed to the UK offshore wind market and will continue to make significant investments in the country’s green transformation, both onshore and offshore, Lerup added.
Agreement on the sale of the Hornsea 2 transmission assets
In addition to the sale of its minority stake in London Array, Ørsted has also announced that Breesea Limited, Soundmark Wind Limited and Sonningmay Wind Limited, a joint venture owned by Ørsted (50 percent) and AXA IM Alts and Crédit Agricole Assurances (CAA) (50 percent combined), have signed an agreement to sell their transmission assets to Diamond Transmission Partners Hornsea Two Limited (DTP). DTP is a partnership between Diamond Transmission Corporation Limited and HICL Infrastructure PLC.
The transmission assets include the onshore substation, export cables, offshore reactive compensation substation (RCS) and offshore substation and were valued by Ofgem at £1.141 billion (€1.321 billion).
Ørsted will continue to provide operation and maintenance services for the transmission assets to DTP under a long-term agreement.
Share price turns negative
The Ørsted share, listed in the renewable stock index RENIXX World, fell by 4 percent last week to a price of 80.26 euros (closing price, July 21, 2023, Stuttgart Stock Exchange). In yesterday’s trading, the stock almost fully compensated for the previous week’s loss with a gain of 3.7 percent to 83.24 euros following the announcement of the London Array transaction (closing price, 07/24/2023, Stuttgart Stock Exchange). In today’s trading, however, the share is again trading in the red with a loss of 1.3 percent to 82.14 euros (12:40 p.m., 07/25/2023, Stuttgart Stock Exchange). Compared with the share price at the turn of the year, the share is currently down 4.4 percent.