Ørsted divests share of four US onshore wind farms to Stonepeak
Through the partnership with Stonepeak, Ørsted will recycle capital to support its business plan and future value-creating renewable energy projects
Austin, Texas – March 13, 2024 – Today, Ørsted signed a transaction with Stonepeak, a leading alternative investment firm specializing in infrastructure and real assets, whereby Ørsted will divest to Stonepeak an equity ownership stake in a portfolio consisting of four US onshore wind farms with a total capacity of 957 MW. In a continuation of Ørsted’s farm-down program, this transaction represents the company's first partnership with Stonepeak and the second major farm-down of multiple assets in the U.S.
The value of the transaction is approximately $300 million. In addition, Ørsted has raised approximately $700 million of tax equity proceeds for this portfolio, bringing the total proceeds raised to approximately $1 billion. Going forward, Stonepeak will receive 80 percent of the cash distributions associated with the projects, while Ørsted will continue to operate the portfolio of assets.
“The need for efficient infrastructure with the power to further the energy transition continues to grow, and onshore wind continues to play a major role in helping to meet that demand,” said Anthony Borreca, Senior Managing Director at Stonepeak. “Ørsted’s U.S. onshore assets are young and have been built with trusted technology, which gives us confidence in their potential to make a meaningful and positive long-term impact on the communities they serve. We look forward to partnering closely with Ørsted on this highly contracted, geographically diverse portfolio.”
As part of the transaction, Ørsted retains a unilateral call option for Stonepeak’s interests that can be exercised under certain circumstances after the closing of the transaction. While structured differently, the transaction broadly corresponds to Ørsted’s historical farm-down approach, in which ownership shares of existing operating assets are divested in order to recycle and redeploy capital for future value-creating projects. The unique partnership structure allows Ørsted to maximize capital redeployment while also retaining operational decision-making and long-term optionality around the portfolio.
“This deal signifies the value that our U.S. onshore renewable energy projects can deliver to our investors, while also demonstrating the holistic and flexible approach we take to partnerships and divestments” said David Hardy, EVP and CEO, Americas at Ørsted. “While Ørsted will continue to operate each asset over its lifetime, we will use this capital to fund projects that continue to create the most value for our stakeholders and fuel our growth in the renewable energy sector.”
The portfolio consists of four wind farms across three states, including the Ford Ridge Wind project in Illinois, the Helena Wind and Western Trail Wind projects in Texas, and the Sunflower Wind project in Kansas. The deal represents a total capacity of 957 MW across three different markets: the Electric Reliability Council of Texas (ERCOT), Midcontinent Independent System Operator (MISO), and Southwest Power Pool (SPP).
The projects are all currently operational and have power purchase agreements in place for all or parts of the production capacity. Ørsted will be managing member of the partnership and will continue to provide asset management services to the projects.
Ørsted currently has a portfolio of nearly 6 GW of onshore wind, solar, and battery storage projects in operation and under construction across the U.S.
About Ørsted
A global clean energy leader, Ørsted develops, constructs, and operates offshore and land-based wind farms, solar farms, energy storage facilities, and bioenergy plants. Ørsted was the first energy company in the world to have its science-based net-zero emissions target validated by the Science Based Targets initiative (SBTi) and is recognized as the world’s most sustainable energy developer in the Corporate Knights Global 100 index.
In the United States, the company has approximately 700 employees and a portfolio of clean energy assets and partnerships that includes offshore wind energy, land-based wind energy, solar, battery storage and e-fuels. Ørsted is a U.S. leader in offshore wind energy with approximately 3 gigawatts in development and operates America’s first offshore wind farm, located off the coast of Block Island. Ørsted has a total U.S. land-based capacity of 5 gigawatts across wind, solar, storage technologies and e-fuels. To learn more about the Ørsted U.S. business, visit us.orsted.com or follow the company on Twitter (@OrstedUS), Instagram, and Facebook.
About Stonepeak
Stonepeak is a leading alternative investment firm specializing in infrastructure and real assets with approximately $61.1 billion of assets under management. Through its investment in defensive, hard-asset businesses globally, Stonepeak aims to create value for its investors and portfolio companies, with a focus on downside protection and strong risk-adjusted returns. Stonepeak sponsors investment vehicles focused on private equity and credit. The firm provides capital, operational support, and committed partnership to grow investments in its target sectors, which include communications, energy and energy transition, transport and logistics, social infrastructure, and real estate. Stonepeak is headquartered in New York with offices in Hong Kong, Houston, London, Singapore, and Sydney.
Media Contacts:
Ørsted
Charlotte Bellotte
cbell@orsted.com
857-286-1989
Stonepeak
Kate Beers and Maya Brounstein
corporatecomms@stonepeak.com
646-540-5225
The value of the transaction is approximately $300 million. In addition, Ørsted has raised approximately $700 million of tax equity proceeds for this portfolio, bringing the total proceeds raised to approximately $1 billion. Going forward, Stonepeak will receive 80 percent of the cash distributions associated with the projects, while Ørsted will continue to operate the portfolio of assets.
“The need for efficient infrastructure with the power to further the energy transition continues to grow, and onshore wind continues to play a major role in helping to meet that demand,” said Anthony Borreca, Senior Managing Director at Stonepeak. “Ørsted’s U.S. onshore assets are young and have been built with trusted technology, which gives us confidence in their potential to make a meaningful and positive long-term impact on the communities they serve. We look forward to partnering closely with Ørsted on this highly contracted, geographically diverse portfolio.”
As part of the transaction, Ørsted retains a unilateral call option for Stonepeak’s interests that can be exercised under certain circumstances after the closing of the transaction. While structured differently, the transaction broadly corresponds to Ørsted’s historical farm-down approach, in which ownership shares of existing operating assets are divested in order to recycle and redeploy capital for future value-creating projects. The unique partnership structure allows Ørsted to maximize capital redeployment while also retaining operational decision-making and long-term optionality around the portfolio.
“This deal signifies the value that our U.S. onshore renewable energy projects can deliver to our investors, while also demonstrating the holistic and flexible approach we take to partnerships and divestments” said David Hardy, EVP and CEO, Americas at Ørsted. “While Ørsted will continue to operate each asset over its lifetime, we will use this capital to fund projects that continue to create the most value for our stakeholders and fuel our growth in the renewable energy sector.”
The portfolio consists of four wind farms across three states, including the Ford Ridge Wind project in Illinois, the Helena Wind and Western Trail Wind projects in Texas, and the Sunflower Wind project in Kansas. The deal represents a total capacity of 957 MW across three different markets: the Electric Reliability Council of Texas (ERCOT), Midcontinent Independent System Operator (MISO), and Southwest Power Pool (SPP).
The projects are all currently operational and have power purchase agreements in place for all or parts of the production capacity. Ørsted will be managing member of the partnership and will continue to provide asset management services to the projects.
Ørsted currently has a portfolio of nearly 6 GW of onshore wind, solar, and battery storage projects in operation and under construction across the U.S.
About Ørsted
A global clean energy leader, Ørsted develops, constructs, and operates offshore and land-based wind farms, solar farms, energy storage facilities, and bioenergy plants. Ørsted was the first energy company in the world to have its science-based net-zero emissions target validated by the Science Based Targets initiative (SBTi) and is recognized as the world’s most sustainable energy developer in the Corporate Knights Global 100 index.
In the United States, the company has approximately 700 employees and a portfolio of clean energy assets and partnerships that includes offshore wind energy, land-based wind energy, solar, battery storage and e-fuels. Ørsted is a U.S. leader in offshore wind energy with approximately 3 gigawatts in development and operates America’s first offshore wind farm, located off the coast of Block Island. Ørsted has a total U.S. land-based capacity of 5 gigawatts across wind, solar, storage technologies and e-fuels. To learn more about the Ørsted U.S. business, visit us.orsted.com or follow the company on Twitter (@OrstedUS), Instagram, and Facebook.
About Stonepeak
Stonepeak is a leading alternative investment firm specializing in infrastructure and real assets with approximately $61.1 billion of assets under management. Through its investment in defensive, hard-asset businesses globally, Stonepeak aims to create value for its investors and portfolio companies, with a focus on downside protection and strong risk-adjusted returns. Stonepeak sponsors investment vehicles focused on private equity and credit. The firm provides capital, operational support, and committed partnership to grow investments in its target sectors, which include communications, energy and energy transition, transport and logistics, social infrastructure, and real estate. Stonepeak is headquartered in New York with offices in Hong Kong, Houston, London, Singapore, and Sydney.
Media Contacts:
Ørsted
Charlotte Bellotte
cbell@orsted.com
857-286-1989
Stonepeak
Kate Beers and Maya Brounstein
corporatecomms@stonepeak.com
646-540-5225