Deepwater Wind To Be Acquired by Danish Company in $510 Million Sale

A tour of Deepwater Wind's wind farm off Block Island. Peter Boody photo

Deepwater Wind, the company seeking to develop a 15-turbine wind farm 30 miles off the coast of Montauk, is set to be acquired by European wind energy giant Ørsted for $510 million.

Ørsted and Deepwater’s current owner, the D.E. Shaw Group, on Monday announced the sale, which they said in a statement would result in “the most comprehensive geographic coverage and the largest pipeline of development capacity” in the United States.

“With this transaction we’re creating the number one offshore wind platform in North America, merging the best of two worlds: Deepwater Wind’s longstanding expertise in originating, developing and permitting offshore wind projects in the United States, and Ørsted’s unparalleled track-record in engineering, constructing and operating large-scale offshore wind farms,” Martin Neubert, chief executive officer of Offshore Wind at Ørsted, said in a statement. “Today’s announcement consolidates Ørsted’s position as the global market leader in offshore wind with a strong foothold across Europe, North America and Asia-Pacific.”

According to a news release, Ørsted already has offshore wind development rights of up to 2 gigawatts off the coast of Massachusetts and up to 3.5 gigawatts off the coast of New Jersey, along with an agreement with a Virginia company to construct two 6-megawatt turbines with up to 2 gigawatts total capacity possible. Deepwater Wind has the development rights to for 90 megawatts at the South Fork Wind Farm, and also currently operates a 30-megawatt farm at Block Island and has other projects in the pipeline in New Jersey, Massachusetts, Maryland, Rhode Island Connecticut and Delaware. The two companies’ combined portfolio would amount to more than 10 gigawatts of new offshore wind power by 2030.

Jeffrey Grybowski, chief executive officer of Deepwater Wind, said in a statement the company’s Amagansett-based team and local project office will remain in place as it works to bring the South Fork Wind Farm online in 2022.

“The new company is committed to building the South Fork Wind Farm, just as Deepwater Wind has planned,” Mr. Grybowski said. “We are proud to be building New York’s first offshore wind farm. … We remain committed to working with the community in East Hampton, including commercial fishers, to make this a successful project that benefits the community in several ways.”

In an interview, Mr. Grybowski said Deepwater Wind had actually been “exploring potential partnerships for several years.”

“It’s typical in this industry for these projects and the companies that build them to be the result of a combination or a series of partnerships,” he said. “We have been for several years now exploring a variety of potential partnerships and new investors, and came to the conclusion this summer that Ørsted is the best partner for us for a variety of reasons.”

He said the sale is subject to federal regulatory reviews but is expected to close by the end of this year. The new American operation would be called Ørsted U.S. Offshore Wind.

Clint Plummer, vice president of development for Deepwater Wind, called the South Fork Wind Farm “a very important project for us as well as Ørsted.” He said Ørsted’s acquisition of Deepwater Wind is not expected to have any adverse impacts on the federal and state permitting process. Deepwater Wind formally filed its application on September 14 with the Public Service Commission to run a power transmission line from the wind farm to a landing site in Wainscott and under town roads to a power substation.

“We want to make sure that everything we’re doing in this project is set at the very highest standards and developed in a way that delivers on our promises,” he said.

In a statement to The Express, East Hampton Town Supervisor Peter Van Scoyoc noted Ørsted has a successful international track record and said it “would be well positioned and experienced” to execute the job correctly, which he said is important to East Hampton.