Orsted and Polish energy provider PGE 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.
The projects have a total potential capacity of up to 2.5GW.
Under the agreement, Orsted will subscribe for new shares representing 50% of the total share capital in PGE’s two offshore wind projects Baltica 3 and Baltica 2.
Baltica 3 has a capacity of approximately 1GW and Baltica 2 has a capacity of approximately 1.5GW.
The subscription price for the newly issued shares in Baltica 2 and 3 will amount to a total of PLN 657m (€146.51m)
Both projects are eligible to be included in Poland’s 2021 offshore wind allocation round, where a total of 5.9GW 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.
Orsted chief commercial officer and deputy group chief executive Martin Neubert said: “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 Orsted’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.”
PGE board president Wojciech Dąbrowski added: “Offshore wind energy is a great opportunity for the Polish economy and Polish entrepreneurs.
“It is estimated that over 100 domestic entities can be successfully involved in the preparation, construction and operation of wind farms in the Polish part of the Baltic Sea.
“The Polish Ministry of Climate and Environment estimates the potential offshore energy capacity in the Baltic Sea to be 11GW by 2040, and estimates the total value of the investments to be up to PLN 160bn (€35.68bn).
“The potential of the Baltic Sea for attracting offshore investments is enormous and that is why we are counting on leveraging mutual experience and joint preparation for the operational phase of both projects, especially due to ambitious plans of PGE for offshore.
“We aim to install at least 6.5GW of offshore capacity by 2040.”