ORSTED – Ørsted divests its remaining 25 % share of London Array to funds managed by Schroders Greencoat

July 24, 2023
ORSTED

Ørsted has signed an agreement with funds managed by Schroders Greencoat, a global specialist asset manager focusing on renewable energy infrastructure assets, to divest its remaining 25 % minority interest in the London Array Offshore Wind Farm in the UK. 

 

The total value of the transaction is GBP 717 million (DKK 6.17 billion).

 

London Array has a total installed capacity of 630 MW and entered commercial operation in 2013. Ørsted originally owned 50 % of the project and divested an initial 25 % of London Array to CDPQ in 2014. Ørsted does not have O&M responsibility at London Array, and as the company only holds a minority interest, Ørsted considers the asset non-strategic.

Ørsted remains the largest player in UK offshore wind, where the company operates more than 5 GW of capacity and has a development pipeline that includes the 2.8 GW Hornsea 3, the world’s single largest offshore wind farm, and the Hornsea 4 project which received consent in mid-July.  

Daniel Lerup, Chief Financial Officer at Ørsted, says:
“We’re very pleased to have found a strong new owner for our remaining minority interest in London Array. We continue to see significant appetite for offshore wind as an asset class, and with this divestment, we continue our unrivalled track record of efficiently recycling capital to help fund our DKK 475 billion investment programme towards 2030. Ørsted remains committed to the UK offshore wind market and will continue to make significant investments in the country’s green transformation both onshore- and offshore.”

 

The transaction is expected to close at the end of July. The gain from the transaction will be part of ‘EBITDA from new partnerships’.

SourceORSTED

EMR Analysis

More information on Ørsted: See the full profile on EMR Executive Services

More information on Mads Nipper (Group President and Chief Executive Officer, Ørsted): See the full profile on EMR Executive Services

More information on Daniel Lerup (Chief Financial Officer, Ørsted): See the full profile on EMR Executive Service

More information on the Ørsted Hornsea 1 Offshore Wind Farm: https://orsted.co.uk/energy-solutions/offshore-wind/our-wind-farms/hornsea1 + 

Powering over 1 million homes with green electricity

Hornsea 1, located in the North Sea, generates enough green energy to power over 1 million UK homes. The wind farm comprises 174 turbines and covers an area of 407 square kilometres (157.2 square miles), which is over five times the size of the city of Hull.

  • 1.2GW The combined total capacity of the project
  • 174 7MW wind turbines
  • 900km Cable route

Located 120 km (74.6 miles) off the Yorkshire coast in the North Sea, Hornsea 1 is our 12th operational wind farm in the UK. It was the world’s first offshore wind farm to exceed 1 GW in capacity and produces enough green energy to power well over one million homes. 

Hornsea 1 became fully operational in 2019 and is operated and maintained from our East Coast Hub in Grimsby which supports a workforce of more than 370 people. 

The offshore wind farm is owned by Ørsted (50%) and Global Infrastructure Partners (50%).

More information on the Ørsted Hornsea 2 Offshore Wind Farm: https://hornseaprojects.co.uk/hornsea-project-two + Powering well over 1.4 million homes with green electricity.

Hornsea 2 Offshore Wind Farm is located approximately 89 km (55.3 miles) off the Yorkshire coast in the North Sea and adjacent to Hornsea One offshore wind farm.

Hornsea 2 key facts:

  • 165 Siemens Gamesa 8MW turbines
  • Hornsea Two will have a capacity of over 1.3GW and provide power to more than 1.4 million homes
  • Located approximately 89km off the Yorkshire coast in the North Sea
  • Hornsea Two will span an offshore area of 462km²
  • Landfall at Horseshoe Point
  • Became fully operational on 31 August 2022

More information on the Ørsted Hornsea 3 Offshore Wind Farm: https://hornseaproject3.co.uk/ + Hornsea Three offshore wind farm could meet the average daily needs of well over 3 million UK homes.

In August 2015, Ørsted acquired the rights to develop the Hornsea Zone from SMart Wind Ltd, who were originally awarded the zone in The Crown Estate Round 3 bid process. To date, Hornsea One and Hornsea Two have both received planning consent, with Hornsea One now operational and Hornsea Two currently under construction.

On 14 May 2018, we submitted a Development Consent Order (DCO) application for a  third project in the zone, Hornsea Project Three Offshore Wind Farm.

The application was accepted by the Planning Inspectorate in June 2018 and was granted consent by the Secretary of State for the Department for Business, Energy and Industrial Strategy on 31 December 2020. 

  • Location:
    • Hornsea Three will be located in the North Sea, approximately 120 km off the Norfolk coast and 160 km off the Yorkshire coast.
  • Size:
    • Up to 231 offshore wind turbines will be located within a 696 km2 area.
  • Power output:
    • The wind farm will be capable of generating at least 2.85 GW of green electricity, enough to meet the average daily needs of well over 3 million homes.

More information on Luke Bridgman (Senior Project Director, Hornsea 3, Orsted): See the full profile on EMR Executive Services

More information on the Ørsted Hornsea 4 Offshore Wind Farm: https://hornseaprojects.co.uk/hornsea-project-four  + Hornsea 4 offshore wind farm has been consented on 12.07.2023.

Hornsea 4 is the first ever offshore wind farm to be examined alongside a derogation case including environmental compensation.

We are now reviewing the full detail of the Development Consent Order and will continue to work closely with stakeholders and local communities as we look to take Hornsea 4 forward sensitively and sustainably.

Offshore wind projects such as Hornsea 4 are key to the UK’s energy security and will bring billions of pounds of investment into the UK, provide low-cost electricity for consumers and thousands of high-quality jobs.

  • Location: Ørsted is proposing to develop Hornsea Four, 69km (at its closest point) off the Yorkshire Coast.
  • Size: We are currently investigating an offshore area of up to 492 km2 where up to 180 wind turbines could be located.

 

More information on Schroders Greencoat: https://www.schrodersgreencoat.com/ + Schroders Capital – your partner for private assets, offering investors access to a broad range of private assets.

In order to reach Net Zero the world requires enormous capital investment in renewable energy and its associated Infrastructure, representing a multi-trillion dollar opportunity globally. Schroders Greencoat has the ambition to become a global conduit for institutional capital investing in renewables by providing the financial, technical and operational expertise aimed at delivering secure incomes for investors.

Founded In 2009, Schroders Greencoat has established a strong reputation for its delivery of our investment propositions, as well as for innovation – our pioneering offering has become the model for an entire industry sector. We are the largest renewables investment manager in the UK and Europe, and are now expanding into North America.

  • $93bn in assets under management across private equity, private debt and credit alternatives, real estate, and infrastructure.
  • 680+ employees dedicated to private assets including 300+ investment professionals in 25 locations around the world.
  • The breadth of perspective and the scale to build holistic solutions and to take best practices in sustainability and impact investing to their full potential.

 

More information on the London Array Offshore Wind Farm: https://londonarray.com/ + London Array is one of the world’s leading offshore wind farms. Its conception and construction attracted international attention, and paved the way for the current generation of even larger wind farms being built around Britain’s coastline. London Array continues to be at the forefront of innovation in the production of offshore renewable energy.

Located 20km off the north Kent coast in the Outer Thames Estuary, London Array has a 630MW capacity and generates enough clean electricity to power around 500,000 British homes, while displacing around 900,000 tonnes of CO2 a year. It is maintained and operated from the Port of Ramsgate.

London Array Limited is a consortium of four shareholders: RWE, Orsted, Masdar & La Caisse de dépôt et placement du Québec (CDPQ)

 

More information on the Caisse de dépôt et placement du Québec (CDPQ): https://www.cdpq.com/en + We are a global investment group present in all major markets with 402 billion Canadian dollars in assets and offices in ten countries. 

We invest constructive capital—in private equity, equity markets, private credit, infrastructure and real estate—to create opportunities and position enterprises to succeed.

More information on Charles Emond (President and Chief Executive Officer, Caisse de dépôt et placement du Québec (CDPQ)): https://www.cdpq.com/en/about-us/governance/executive-committee/charles-emond + https://www.linkedin.com/in/chemond/?locale=en_US 

 

 

 

EMR Additional Notes: 

  • O&M (Operations and Maintenance): 
    • In maintenance and construction, O & M refers to the functions, duties and labour associated with daily operations. The ultimate goal is to preserve an asset so that it continues to provide reliable services throughout its expected useful life.