Canada-based Northland Power has entered into an agreement with Poland's PKN ORLEN to acquire a 49% interest in the Baltic Power offshore wind project in the Baltic Sea with a total capacity of up to 1,200 megawatts (MW) of offshore wind generation.
Baltic Power is a mid-development stage project located approximately 23 kilometers offshore from Poland’s coast in the Baltic Sea
"The project, which secured its location permit, signed its grid connection agreement as well as filed its environmental permit in 2020, allows Northland to capitalize on the growth in renewable energy demand in a growing Central European market," the Canadian offshore wind farm developer said.
Inclusive of the purchase price, Northland expects to invest approximately PLN 290 million (CAD $100 million) towards the Baltic Power development in 2021, of which, some of this amount represents development expenditures that will be spent throughout 2021.
The company said that 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 cashflow," the company said.
Northland currently 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).
According to Northland, 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, the company said.
Northland’s offshore wind portfolio includes operating and development projects in Europe as well as a development portfolio in Asia encompassing the 1,044 MW Hai Long, 1,000 MW Dado Ocean and 600 MW Chiba projects in Taiwan, South Korea and Japan respectively.