With Deepwater Wind’s takeover, there’ll be less competition for offshore projects in Mass.
The Danish energy company Orsted has reached a $510 million deal to take over Deepwater Wind, a rival wind farm developer, from the investment firm D.E. Shaw & Co.
For Massachusetts, that means one less competitor on the scene when the next offshore wind contracts go out to bid.
Both companies competed in the first round of bidding on offshore projects. But a third competitor, Vineyard Wind, beat out both of them in May, in part by showing it would be able to more cheaply build a wind farm with as many as 100 turbines, generating up to 800 megawatts, south of Martha’s Vineyard. (Other companies have also expressed an interest in leasing federal waters off of New England for wind farms.)
Orsted, whose North American operations are based in Boston, is much larger and has more experience than Deepwater Wind, with a history of developing offshore projects in Europe. (Orsted used to be called DONG Energy, an acronym that translated to Danish Oil and Natural Gas but also prompted more than a few jokes in English.)
Despite Orsted’s size advantage, Deepwater so far seems to have had better luck landing contracts for US projects.
The Providence company built the only operational offshore wind farm the United States, a 30-megawatt project off Block Island, in operation since 2016. And Deepwater has contracts in place — or pending finalization — for projects that would together total 810 megawatts off the coasts of New England, New York, and Maryland.
Orsted, meanwhile, is building two 6-megawatt wind turbines for Dominion off Virginia’s coast.
Both Orsted and Deepwater have vast development rights beyond these projects for waters off the East Coast. Orsted also recently reached a deal to acquire Lincoln Clean Energy, a US developer of onshore wind farms.
Martin Neubert, Orsted’s offshore wind chief executive, said the Deepwater deal will enable Orsted to combine its track record in building and operating large-scale offshore wind farms with Deepwater’s expertise in developing wind farm projects in the United States.
The deal is expected to close this year, pending federal antitrust approval. The merged organization would be called Orsted US Offshore Wind, led by executives from both companies, including Thomas Brostrom from Orsted and Jeff Grybowski from Deepwater Wind. The company would maintain existing offices in Boston and Providence.