Northland Power has entered into an agreement with PKN Orlen to acquire a 49% interest in the Baltic Power offshore wind project in the Baltic
The offshore windfarm has a capacity of up to 1.1 GW of offshore wind generation and is a mid-development stage project approximately 23 km offshore from Poland’s coast in the Baltic.
The project, which secured its location permit, signed its grid connection agreement and filed an environmental permit in 2020, allows Northland to capitalise on the growth in renewable energy demand in a growing central European market.
Inclusive of the purchase price, Northland expects to invest approximately C$100M (US$78M) in Baltic Power in 2021.
Northland Power president and chief executive Mike Crawley said the deal strengthens the company’s position in offshore wind development.
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 also a major player in the Polish energy market, with generation capacity of 3.2 GW.
The Northland and PKN Orlen partnership will co-develop Baltic Power, which is expected to secure a 25-year contract for difference 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 activity is due to start in 2023 with commercial operation expected in 2026.