Ørsted and PGE Polska Grupa Energetyczna. 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.
Block Island Wind farm off the coast of Rhode Island (Ørsted)
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 and 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 PLN 657 million.
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.
Subject to regulatory approval, the transaction is expected to close in Q1 2021.
Martin Neubert, Chief Commercial Officer and Deputy Group CEO, says, “Poland is emerging as the front runner in offshore wind in the Baltic Sea and we are very excited to enter the Polish market with this joint venture with PGE. This transaction brings together Ørsted’s unparalleled track-record in developing and constructing large-scale offshore wind farms with PGE’s extensive knowledge of and experience in the Polish energy market and its regulatory framework. Our new joint venture is strongly committed to delivering on the Polish Government’s ambitious plans for the deployment of offshore wind.”
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 combination of Ørsted’s world class offshore wind expertise with PGE’s Polish power market expertise and experience will form a market-leading 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.
Monika Morawiecka, President of the Management Board of PGE Baltica, says, “We look forward to the launch of a joint project to build the Baltica 2 and Baltica 3 offshore wind farms together with Ørsted. The two projects we will develop together are among the most advanced offshore projects in Poland. They will provide green energy to 4 million households and will avoid over 8 million tons of carbon emissions per year. PGE's share of CAPEX for Baltica 2 and 3 represents a significant investment in Poland's energy transition.”