“Today's announcement reflects Northland's continued growth and leadership in renewable energy and strengthens our position as a global leader in offshore wind development,” said Mike Crawley, Northland’s President and Chief Executive Officer. “We are excited to partner with PKN ORLEN to expand our presence in Europe through the development of the Baltic Power offshore wind project, but more importantly, further contribute to the global decarbonization transition by helping Poland fulfill its renewable energy ambitions.”
PKN ORLEN is the largest company in Central and Eastern Europe and is publicly listed on the Warsaw Stock Exchange. The company is part of the ORLEN Group, which has operations in six markets: Poland, the Czech Republic, Germany, Lithuania, Slovakia, and Canada. PKN ORLEN is a major player on the Polish energy market, with generation capacity of 3.2 GWe.
"The selection of a partner for the implementation of an offshore wind farm is a milestone of a pioneering investment process in the region. The combination of our local experience, resulting from advanced preparatory works, with the global know-how of Northland Power will allow us to quickly and efficiently implement the next stages of the investment. We are glad that we have acquired a partner whose business model and vision of energy transformation coincide with the long-term plans of the ORLEN Group. Our cooperation is an important development impulse for the offshore industry, including Polish enterprises that will participate in the supply chain,” said Daniel Obajtek, President of the Management Board of PKN ORLEN.
The Northland and PKN ORLEN partnership will co-develop the Baltic Power opportunity that is expected to secure a 25-year Contract for Difference (CfD) offtake agreement, providing Northland an investment consistent with the company’s objectives of creating high-quality projects underpinned by revenue contracts that deliver predictable cash flows. Construction activities are scheduled to start in 2023 with commercial operations expected in 2026.
Baltic Power is a natural addition to Northland’s extensive offshore wind portfolio and provides the company with a new market to further enhance the geographic and regulatory diversity in its portfolio and cashflows. Currently, Northland has controlling interests in three operational offshore wind facilities in the North Sea, Gemini, Nordsee One and Deutsche Bucht farms with a total combined gross capacity of approximately 1,200 MW (890 MW net to Northland). Once complete, Baltic Power will substantially increase Northland’s total gross offshore wind capacity in Europe up to approximately 2,400 MW (1,500 MW net).
Energy demand in Poland is expected to rise over the coming decades as the country continues its economic growth. Poland’s draft energy policy foresees the need to add 10 to 12 GW of offshore wind capacity and an additional 15 GW of solar capacity by 2040 and the country’s recent passing of its Offshore Wind Act paves the way for Poland to develop offshore wind. This will result in a significant amount of investment into renewable energy generation. Once complete, Baltic Power will make a significant contribution to the future of clean and green energy production in Poland.
Following the conclusion of the joint venture agreement, the direct partner of Baltic Power will be NP Baltic Wind BV with its seat in the Netherlands, which remains 100% indirectly dependent on Northland Power Inc. listed on the Toronto Stock Exchange. (NPI). NP Baltic Wind BV is a special purpose vehicle established by NPI for the purposes of the Project implementation together with PKN ORLEN.
Please note: All amounts expressed herein converted into Canadian Dollars at an exchange rate of PLN/Cad of 0.34.