Energy Majors Expands Offshore Wind Investment as Equinor Buys Ørsted Stake
Equinor has acquired shares of Ørsted which will make it the largest private investor in the renewable energy company and second only to the Danish state. The Norwegian energy company is calling its investment a long-term play on the renewable energy sector. It comes as France’s TotalEnergy is expanding its investment into offshore wind energy reporting it will acquire a 50 percent state in two development projects in Germany started by RWE.
After a difficult period where offshore energy developments were retrenching with concerns over rising costs, power pricing agreements, and supply chains, majors are expanding their investments into the sector. Analysts continue to view it as a good long-term opportunity with steady income potential. In the U.S., Global Infrastructure Partners, which was acquired by famed group BlackRock, last week completed its acquisition of Eversource’s partnership with Ørsted for U.S. wind farms.
Equinor reported today that it has acquired nearly 41.2 million shares of Østead with a current market value of approximately $2.5 billion. It holds 9.8 percent of the outstanding shares of Ørsted, but said based on market rules it would not increase its position past 10 percent. Also, it will not seek a board seat. The position was built over time through market purchases and a block trade.
“Equinor has a long-term perspective and will be a supportive owner in Ørsted,” said Anders Opedal, CEO of Equinor. “This is a counter-cyclical investment in a leading developer, and a premium portfolio of operating offshore wind assets. The exposure to producing assets complements Equinor’s operated offshore wind portfolio of large projects under development.”
Opedal acknowledged that offshore wind “is currently facing a set of challenges,” but said they remain confident in the long-term outlook for the sector, and its crucial role in the energy transition. Equinor highlights Ørsted’s leading role with around 10.4 GW of renewable energy capacity and a further 7 GW in execution.
TotalEnergy also reported that it would enter a partnership with RWE to develop 4 GW of wind energy off the German coast. RWE won the rights for two sites in Germany’s recent auction with the potential to develop large wind farms approximately 70 miles northwest of Borkum in the North Sea. RWE already operates six offshore wind farms off the German coast and has the Nordseecluster with a further 12.6 GW under construction.
The project plan for the two sites anticipates investment decisions in 2027 and 2028 with offshore construction starting in 2029 and 2030. The partners anticipate full commissioning for the two wind farms in 2031 and 2032.
RWE has a total of 19 offshore wind farms in operation. It already has partnerships with TotalEnergy for the development of offshore wind energy in the Netherlands as well as projects under development in the UK and Denmark. RWE’s goal is to triple its global offshore wind capacity from 3.3 GW currently to 10 GW by 2030.