Deepwater Wind, the Rhode Island-based company that is building a 90-megawatt wind farm to supply Long Island’s South Fork with power, has agreed to be purchased by Danish energy giant Orsted for $510 million.
The agreement, announced by both companies Monday morning, would create a combined company with offshore wind leases and projects across the Eastern United States. Orsted, formerly known as DONG Energy (Danish Oil and Natural Gas), has offshore wind lease rights off the coast of Massachusetts, Virginia and New Jersey.
Deepwater Wind, which built the first U.S. offshore wind farm off Block Island, has proposed projects throughout the northeast and is, like Orsted, a bidder for about 800 megawatts of offshore wind proposed for the waters off Long Island.
Jeff Grybowski, chief executive of Deepwater, said in a statement Monday morning the company will continue to move forward with the proposed South Shore wind farm, which includes turbines to be erected in ocean waters off Rhode Island about 30 miles from Montauk Point. The project, which is opposed by Long Island commercial fishing groups, is set to be in operation by 2022.
“The new company is committed to building the South Fork Wind Farm, just as Deepwater Wind has planned,” he said, adding the company’s Amagansett-based team and local project office will remain.
The purchase awaits federal regulatory approvals and is expected to be completed before year’s end.
Grybowski, in an interview, said the acquisition by Orsted was a “pretty typical step for a company like ours,” in a U.S. wind-energy market that is accelerating and has “become a real focal point of the [world] offshore wind market.” Most large projects like those being proposed by Deepwater are “generally built in partnership,” he said.
Grybowski will take the role of co-chief executive officer of the newly combined U.S. Orsted wind company, along with Thomas Brostrom, the current CEO of Orsted U.S. offshore wind.
Brostrom noted that Orsted has built 25 projects globally, but “none in the U.S.”
He also said, “Deepwater has the savvy and skilled permitting and development teams” in the United States to help with future projects.
Deepwater in May won a bid by Rhode Island to build a 400-megawatt offshore wind farm in the Massachusetts-Rhode Island lease area, a bid that Orsted has also sought.
Orsted, a largely Danish-state owned entity with outside investors that include an investment group tied to Goldman Sachs, is the world’s largest wind-energy developer, with a 25 percent to 30 percent market share. Brostrom said he expects the Deepwater acquisition will catapult the company to one among the largest in the burgeoning U.S. market,
“We would like to maintain a good position not only globally but also in the U.S. market,” he said. “We would like to be one of the biggest if not the biggest player in U.S. market.”
But at least one group saw cause for concern.
“These are foreign oil and gas companies that are coming to the U.S. and taking our fisheries away from us without any mitigation or negotiations,” said Bonnie Brady, executive director of the Long Island Commercial Fishing Association, an industry group. “It’s ridiculous. You want to talk about a job killer. This is the biggest threat to the U.S. commercial fishing on the Eastern Seaboard.”
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