A consortium comprising Norges Bank Investment Management (NBIM), AIP Management, and Allianz Capital Partners will each purchase a 16.6% stake in the project from EnBW. The transaction values the wind farm at €2.6bn, with each party investing €430mn for its stake. No external debt financing will be involved in the deal. EnBW will continue as the majority owner and operator of the wind farm, expected to be operational by the end of 2025. Parallel to the equity investment, EnBW has secured a €600mn loan from the European Investment Bank (EIB) for the project. The move expands the existing relationship between EnBW and EIB, building on EIB support for offshore wind farms EnBW Baltic 1 in 2011 and EnBW Baltic 2 two years later.
EnBW was awarded the rights to build He Dreiht in 2017 with a zero-cent bid, as part of a German tender. According to the company’s CFO Thomas Kusterer, a combination of factors made the zero-cent bid possible, including installation of the latest wind turbine technology (64 V236 - 15 MW turbines supplied by Vestas), synergies with existing sites and long-term power purchase agreements (PPAs) with industrial customers, which have a stabilizing effect on wind farm revenues. Historically, offshore wind has relied on subsidies to secure stable revenue streams that attract investment. The rise of subsidy-free bids exposes the project developer to the full variability and merchant risk of the open market. However, amid a sharp decline in offshore wind installation costs and rising demand for clean power from corporate off-takers, several utilities have supported the prevalence of zero-subsidy bids. Danish heavyweight Orsted, who also won the rights to develop three projects totaling 590 MW of capacity in 2017 via zero-subsidy bids, stated that “the zero bid is enabled by a number of circumstances in this auction. Most notably, the realization window is extended to 2024. This allows developers to apply the next generation turbine technology, which will support a major step down in costs.”
Technical advisor DNV highlighted the importance of corporate PPAs in securing financing for zero-subsidy offshore wind farms. This is evident in EnBW’s power marketing strategy for the He Dreiht project, which includes five 15-year corporate PPAs for 335 MW of the total output. The agreements were signed starting Dec’21, with the latest PPA closed in Mar’23. The off-taker consortium comprises Bosch, Evonik, Salzgitter, and Fraport. Talks with other companies to contract the remaining output are underway, EnBW stated.
The above analysis is proprietary to Enerdatics’ 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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