Renewable Energy M&A: Orsted sells 1 GW wind portfolio in the US to Stonepeak for $300mn, refines growth strategy

published on 15 March 2024

šŸ”„ Portfolio Sale: Orsted divests a 957 MW onshore wind portfolio in ERCOT, SPP, and MISO to Stonepeak for $300 million, marking its first partnership with Stonepeak and second onshore farm-down in the US, following a $410mn transaction with Energy Capital Partners.

šŸ’° Financial Strategy: Stonepeak receives 80% of cash distributions, while Orsted retains a call option for Stonepeak's interests. This aligns with Orsted's traditional farm-down strategy, where shares of operational assets are divested to recycle and redeploy capital into new, value-generating projects.

šŸ“ˆ Business Plan Update: Orsted's Feb'24 update focuses on risk mitigation and sustained growth through farm-downs. Orsted expects to generate $17bn through divestments by 2030, with $11-12bn anticipated between 2024-2026. Consequently, Orsted has revised its 2030 renewable capacity target from 50 GW to 35-38 GW.

šŸŒ Strategic Refocus: The company is exiting markets in Norway, Spain, and Portugal, scaling back activities in Japan, and streamlining its approach to floating offshore wind and P-t-X development. Orsted believes that its project portfolio is now more robust, and it can focus on its offshore strategy in the US.

The above analysis is proprietary to Enerdaticsā€™ energy analytics team, based on the current understanding of the available data. The information is subject to change and should not be taken to constitute professional advice or a recommendation.

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