Northland Power Announces Sale of its 49 Per Cent Interest in the Nordseecluster Offshore Wind Projects to its Partner, RWE
TORONTO, May 25, 2023 (GLOBE NEWSWIRE) — Northland Power Inc. (“Northland” or the “company”) (TSX: NPI) announces the sale of its full 49 per cent ownership stake in the Nordseecluster offshore wind portfolio (NSC) to its partner on the portfolio, RWE Offshore Wind GmbH (RWE). The sale provides RWE with 100 per cent ownership of the projects for a cash consideration of approximately EUR 35 million, which represents a premium to Northland’s costs incurred to date. This transaction will transfer the assets and liabilities, and all committed contractual obligations of Northland in relation to NSC, to RWE. NSC’s total gross capacity comprises 1,560 megawatts (MW) of offshore wind projects including: Nordsee Two, Nordsee Three, Delta Nordsee and Godewind.
“Northland is constantly evaluating its 19-gigawatt (GW) portfolio and prioritizes projects that are strategically and financially consistent with its investment approach. Evaluation of the NSC in the current environment is leading to higher expected costs for the project, that are only partially being offset by higher expected revenue offtake. As a result, the project no longer meets Northland’s investment criteria,” said Mike Crawley, President and CEO, Northland.
The sale of the NSC is not expected to impact Northland’s growth trajectory, as the company has a large development pipeline of renewable projects that are expected to deliver material growth in capacity and Adjusted EBITDA by 2030.
“Offshore wind is a focal point of our strategy and with growth in offshore wind set to outpace all other renewables, Northland’s leading position in offshore wind positions the Company to be a significant player in this segment through the decade. I want to acknowledge and thank the employees involved in the development of these projects for their contributions and efforts to Northland’s success,” added Mr. Crawley.
Developing, constructing and operating offshore wind facilities is an important part of Northland’s growth strategy. The company expects that significant increases to its renewable capacity will come from offshore wind projects and will drive value and growth over the next decade. Europe and Germany remain important markets for Northland as the company continues to look to support development of renewable energy to achieve their decarbonization goals.
- Northland has a 60 per cent interest in the 600 MW Gemini project in the Netherlands which achieved commercial operations in 2017, while in Germany, the Company has an 85 per cent interest in the 332 MW Nordsee One project, which achieved commercial operations in 2018, and 100 per cent interest in the 252 MW Deutsche Bucht project, which achieved commercial operations in 2020.
- In Poland, Northland is developing the Baltic Power offshore wind project, which it has a 50 per cent interest and is expected to reach financial close in 2023 with full commercial operations in 2026.
- In Scotland, Northland’s efforts are focused on developing its two ScotWind projects, Spiorad na Mara and Havbredey, which it has a 75.5 per cent interest. The projects encompass 2.3 GW of fixed and floating foundation projects expected to reach commercial operations in late 2029/2030 for the fixed foundation project, and early 2030s for the floating foundation project.
Globally, the company’s current priority is to develop and achieve financial close for two significant offshore wind projects in 2023, the 1 GW Hai Long project in Taiwan and the 1.2 GW Baltic Power project in Poland.
The company’s pipeline includes 19 GW of offshore and onshore renewable projects in Canada, US, Europe, Asia, and Latin America.
ABOUT NORTHLAND POWER
Northland Power is a global power producer dedicated to helping the clean energy transition by producing electricity from clean renewable resources. Founded in 1987, Northland has a long history of developing, building, owning and operating clean and green power infrastructure assets and is a global leader in offshore wind. In addition, Northland owns and manages a diversified generation mix including onshore renewables, efficient natural gas energy, as well as supplying energy through a regulated utility.
Headquartered in Toronto, Canada, with global offices in eight countries, Northland owns or has an economic interest in 3.0 GW (net 2.6 GW) of operating capacity. The Company also has a significant inventory of projects in construction and in various stages of development encompassing over 19 GW of potential capacity.
Publicly traded since 1997, Northland’s common shares, Series 1 and Series 2 preferred shares trade on the Toronto Stock Exchange under the symbols NPI, NPI.PR.A and NPI.PR.B, respectively.
This press release contains certain forward-looking statements including certain future oriented financial information that are provided for the purpose of presenting information about management’s current expectations and plans. Readers are cautioned that such statements may not be appropriate for other purposes. Forward-looking statements include statements that are predictive in nature, depend upon or refer to future events or conditions, or include words such as “expects,” “anticipates,” “plans,” “predicts,” “believes,” “estimates,” “intends,” “targets,” “projects,” “forecasts” or negative versions thereof and other similar expressions or future or conditional verbs such as “may,” “will,” “should,” “would” and “could.” These statements may include, without limitation, statements regarding Northland’s expectations for guidance, the completion of construction, attainment of financial close and commercial operations which may differ from expectations stated herein, the potential for future production from project pipelines, cost and output of development projects, litigation claims, plans for raising capital, the potential impact of certain tax credits, and the future operations, business, financial condition, financial results, priorities, ongoing objectives, strategies and outlook of Northland, and its subsidiaries and joint ventures. There is a risk that delays in closing the financings, failure to obtain the anticipated level of finance commitments and failure to close one or more financings could affect construction schedules and/or Northland’s cash or credit position and capital funding needs. These statements are based upon certain material factors or assumptions that were applied in developing the forward-looking statements, including the design specifications of development the projects, the provisions of contracts to which Northland or a subsidiary is a party, management’s current plans and its perception of historical trends, current conditions and expected future developments, the ability to obtain necessary approvals, satisfy any closing conditions, or obtain adequate financing regarding contemplated construction, acquisitions, dispositions, investments or financings, as well as other factors that are believed to be appropriate in the circumstances. Although these forward-looking statements are based upon management’s current reasonable expectations and assumptions, they are subject to numerous risks and uncertainties. Some of the factors include, but are not limited to, risks associated with sales contracts, Northland’s reliance on the performance of its offshore wind facilities at Gemini, Nordsee One and Deutsche Bucht for approximately 50% of its Adjusted EBITDA and Free Cash Flow , counterparty risks, contractual operating performance, variability of sales from generating facilities powered by intermittent renewable resources, offshore wind concentration, natural gas and power market risks, commodity price risks, operational risks, recovery of utility operating costs, Northland’s ability to resolve issues/delays with the relevant regulatory and/or government authorities, permitting, construction risks, procurement and supply chain risks, project development risks, disposition and joint-venture risks, acquisition risks, financing risks, interest rate and refinancing risks, impact of regional or global conflicts, liquidity risk, credit rating risk, currency fluctuation risk, variability of cash flow and potential impact on dividends, taxation, natural events, environmental risks, climate change, health and worker safety risks, market compliance risk, government regulations and policy risks, utility rate regulation risks, international activities, cybersecurity, data protection and reliance on information technology, labour relations, reputational risk, insurance risk, risks relating to co-ownership, bribery and corruption risk, terrorism and security, legal contingencies, and the other factors described in the “Risks Factors” section of Northland’s 2022 Annual Information Form, which can be found at www.sedar.com under Northland’s profile and on Northland’s website at northlandpower.com.
The forward-looking statements contained in this release are based on assumptions that were considered reasonable as of the date hereof. Other than as specifically required by law, Northland undertakes no obligation to update any forward-looking statements to reflect events or circumstances after such date or to reflect the occurrence of unanticipated events, whether as a result of new information, future events or results, or otherwise.
For further information, please contact:
Mr. Wassem Khalil, Senior Director, Investor Relations