One of the biggest offshore wind developers in Europe, a Danish company called Ørsted, purchased US offshore wind developer Deepwater Wind on Monday. The move suggests confidence in an expanding US offshore wind industry.
There are more than 15 gigawatts (GW) of offshore wind in Europe, with more capacity being added every year.
But in the US, only one commercial offshore wind installation currently generates power: Deepwater Wind's 30 megawatts (MW) pilot project off Block Island, Rhode Island. Still, the Atlantic Coast is seen as fertile ground for an expanding offshore wind industry, as the coastal area is near huge population centers with strong, reliable ocean breezes.
Consequently, contracts for bigger offshore wind installations off Massachusetts and New York have been signed in the previous year. But Ørsted had trouble landing some of these bigger contracts, according to The Wall Street Journal. Despite the Danish company's experience, Deepwater Wind had more success wooing local governments and US-based utilities. With Ørsted's purchase of Deepwater Wind, the European engineering firm hopes to take advantage of Deepwater's ability to close US deals. The US company has a project off the coast of Long Island and a second project off the coast of Rhode Island in development.
According to The New York Times, Ørsted paid Deepwater Wind's owner, hedge fund D.E. Shaw Group, $510 million to acquire the firm. Deepwater Wind will become Orsted US Offshore Wind, the Times writes.
"We can see a very large industry emerging," Thomas Brostrøm, the chief executive of Ørsteds US offshore wind division told the WSJ. "We believe that, over the next 10 years, we can see 10 gigawatts of offshore wind being built—and we want to be in a good position to take advantage of this growth." Ten gigawatts of offshore wind is an enormous number—Ørsted itself says it will only have 7.45GW by the end of 2020. That includes offshore wind farms in the UK, Denmark, Germany, and Taiwan.
Ørsted was formerly known as DONG Energy (short for Danish Oil and Natural Gas). Recently, the firm sold off its coal plants and oil and gas fields and pivoted into renewable energy, the WSJ wrote.