Avangrid and CIP announce transaction to advance offshore wind development
The parties’ will restructure their 50/50 joint venture which owns several US offshore wind projects with a combined capacity of 5.3 GW
Avangrid Renewables, a subsidiary of AVANGRID, and Copenhagen Infrastructure Partners (CIP), have announced a restructuring of their Vineyard Wind joint venture which will enable both companies to leverage their strengths and expertise to continue to grow the U.S. offshore wind industry.
The Vineyard Wind joint venture, which pioneered offshore wind in the United States, has successfully built a portfolio that includes Vineyard Wind 1, the first commercial scale offshore wind project in U.S. waters. Vineyard Wind 1, an 800-megawatt (MW) project that will deliver clean energy to Massachusetts beginning in 2023, reached financial close last week and is beginning construction this month.
Vineyard Wind 1 will continue to be developed as a 50/50 joint venture between the partners and Avangrid Renewables will have an option to gain operational control once the project reaches commercial operation. Avangrid Renewables will take full ownership of lease area OCS-A 0534 which includes Park City Wind, an 804 MW project which will deliver clean energy to Connecticut, and Commonwealth Wind, which last week submitted a bid for up to 1,200 MW to the third Massachusetts offshore wind competitive solicitation.
Copenhagen Infrastructure Partners will take full ownership of lease area OCS-A 0522, the easternmost offshore wind area, which has the potential to deliver over 2,500 MW of clean energy into New England and New York.
Christian T. Skakkebæk, Senior Partner in CIP, said:
“Along with Avangrid Renewables, we have during the previous week achieved the most important milestone for offshore wind in the U.S., and with our partner are excited to lead Vineyard Wind 1 through the construction phase and complete this trailblazing project. Lease area 522 has the highest wind speed of any lease area in the northeast and will be a very competitive site for solicitations from New York to Massachusetts.”
Dennis V. Arriola, CEO of AVANGRID, said:
“We look forward to continuing our partnership with CIP for Vineyard Wind 1 as well as leading Park City Wind and Commonwealth Wind to deliver economic opportunity and clean energy to New England. This restructuring is aligned with our long-term growth strategy and our aspiration to be the leading sustainable energy company in the U.S.”
Once the restructuring is finalized, Avangrid Renewables will make a net payment of $167.5 million in order to acquire 100% of OCS-A 534 containing Park City Wind and Commonwealth Wind. In exchange, CIP will acquire 100% of OCS-A 522. The transaction is subject to consents from key stakeholders and regulators, which include the Bureau of Ocean Energy Management (BOEM) as well as the Connecticut electric distribution companies. The transaction is expected to close in approximately six months during which the parties have agreed on a transition plan.