Ørsted and Polska Grupa Energetyczna (PGE) have agreed to form a 50/50 joint venture to develop, construct and operate two offshore wind projects in the Baltic with a combined potential capacity of up to 2.5 GW
Ørsted will subscribe for new shares representing 50% of the total share capital in PGE’s projects, Elektrownia Wiatrowa Baltica-3 (Baltica 3) and Elektrownia Wiatrowa Baltica-2 (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 PLN657M (US$177M).
Both projects are eligible to be included in Poland’s 2021 offshore wind allocation round, where 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.
Ørsted chief commercial officer and deputy group Martin Neubert said, “Poland is emerging as the front runner in offshore wind in the Baltic. We are very excited to enter the Polish market with this joint venture with PGE. The transaction brings together Ørsted’s track record in developing and constructing large-scale offshore windfarms with PGE’s extensive knowledge of and experience in the Polish energy market and its regulatory framework.”
PGE president Wojciech Dąbrowski said, “Offshore wind 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 windfarms 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 approximately 11 GW by 2040 and estimates the total value of the investment to be up to PLN160Bn.” Mr Dąbrowski said PGE aims to install at least 6.5 GW of offshore capacity by 2040.
PGE Baltica president Monika Morawiecka said, “We look forward to the launch of a joint project to build the Baltica 2 and Baltica 3 offshore windfarms together with Ørsted. The projects we will develop together are among the most advanced offshore projects in Poland. PGE’s share of capex for Baltica 2 and 3 represents a significant investment in Poland’s energy transition.”
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. Ørsted will also significantly expand its on-the-ground presence in Poland.