Ørsted, PGE Form JV for 2.5 GW Offshore Wind Projects in Baltic Sea

Ørsted and PGE will form a 50/50 JV for the development and operation of two offshore wind projects in the Baltic Sea worth 2.5 GW.

Ørsted and PGE Polska Grupa Energetyczna (PGE) have signed an agreement to form a 50/50 joint venture (JV) for the development, construction and operation of two offshore wind projects in the Baltic Sea with a total potential capacity of up to 2.5 GW.

Ørsted will subscribe for new shares representing 50 percent of the total share capital in PGE’s two offshore wind projects, Elektrownia Wiatrowa Baltica-3 sp. z o.o. (Baltica 3) and Elektrownia Wiatrowa Baltica-2 sp z o.o. (Baltica 2). Baltica 3 has a capacity of approximately 1 GW and Baltica 2 has a capacity of approximately 1.5 GW. The subscription price for the newly issued shares in Baltica 2 and 3 will amount to a total of PLN 657 million (USD 177 million).

Both projects are eligible to be included in Poland’s 2021 offshore wind allocation round, where a total of 5.9 GW is expected to be awarded. Baltica 3 is the most advanced of the two projects and could become operational in 2026

Martin Neubert, Chief Commercial Officer and Deputy Group CEO, said “Poland is emerging as the front runner in offshore wind in the Baltic Sea and we are very excited to enter the Polish market with this joint venture with PGE. This transaction brings together Ørsted’s unparalleled track record in developing and constructing large-scale offshore wind farms with PGE’s extensive knowledge of and experience in the Polish energy market and its regulatory framework. Our new joint venture is strongly committed to delivering on the Polish Government’s ambitious plans for the deployment of offshore wind.”

As a part of the agreement, Ørsted and PGE have agreed to establish a framework that enables both parties to effectively integrate and leverage strengths and expertise from both sides. The combination of Ørsted’s world class offshore wind expertise with PGE’s Polish power market expertise and experience will form a market-leading partnership well-positioned to deliver the largest portfolio of offshore wind projects in the 2021 allocation round. As a part of the joint venture, Ørsted will significantly expand its on-the-ground presence in Poland.

Wojciech Dąbrowski, President of the Management Board of PGE Polska Grupa Energetyczna, said that “Offshore wind energy is a great opportunity for the Polish economy and Polish entrepreneurs. It is estimated that over 100 domestic entities can be successfully involved in the preparation, construction and operation of wind farms in the Polish part of the Baltic Sea. The Polish Ministry of Climate and Environment estimates the potential offshore energy capacity in the Baltic Sea to be approx. 11 GW by 2040, and estimates the total value of the investments to be up to PLN 160 billion. The potential of the Baltic Sea for attracting offshore investments is enormous and that is why we are counting on leveraging the mutual experience and joint preparation for the operational phase of both projects, especially due to ambitious plans of PGE for offshore. We aim to install at least 6.5 GW of offshore capacity by 2040.”