TWO OF THE BIGGER PLAYERS in the emerging US offshore wind industry are combining forces, as the Denmark-based Ørsted announced an agreement on Monday to purchase Deepwater Wind of Rhode Island for $510 million.
The deal eliminates one of Ørsted’s leading competitors along the East Coast and creates a company with offshore wind contracts or development rights for projects off the coast of seven states along the East Coast.
Deepwater Wind built the nation’s first wind farm near Block Island and has projects in development in Rhode Island, Connecticut, Maryland, and New York. It also has lease rights for offshore wind projects in Massachusetts and Delaware.
Ørsted touts itself as the world’s largest offshore wind developer. In the United States, it has lease rights for projects in Massachusetts and New Jersey and is under contract to build an offshore wind project for Dominion Energy off the coast of Virginia.
The new US division of Ørsted will be called Ørsted US Offshore Wind and will be run jointly by officials from the two companies. Thomas Brostrom from Ørsted and Jeff Grybowski of Deepwater Wind will both have the title of co-chief executive officer, although Grybowski said in a telephone interview that Brostrom will lead the company. David Hang, an official with the D.E. Shaw hedge fund that owns Deepwater Wind, will have the title of chief financial officer. D.E. Shaw first invested in Deepwater Wind in 2008.
Ørsted and Deepwater Wind competed fiercely for a Massachusetts offshore wind contract earlier this year and neither ended up winning, although Deepwater Wind won a 400 megawatt contract with Rhode Island as part of the process. Massachusetts ended up awarding an 800 megawatt contract to the third company bidding for the contract, Vineyard Wind.
Massachusetts is looking to award contracts for another 800 megawatts of electricity. Although Ørsted’s acquisition of Deepwater Wind means there will be one less competitor, other companies, including Equinor and the PNE Wind Group, are seeking offshore wind leases off the coast of Massachusetts from the federal government. “I think you’ll see a lot of competition,” Brostrom said in a telephone interview.
Grybowski said his company has been looking for additional investors and/or partners for several years, a process that accelerated with its success in landing wind power contracts requiring billions of dollars in investments. He said talks accelerated over the last few months with Ørsted and came to fruition recently.
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About Bruce Mohl
Bruce Mohl is the editor of CommonWealth magazine. Bruce came to CommonWealth from the Boston Globe, where he spent nearly 30 years in a wide variety of positions covering business and politics. He covered the Massachusetts State House and served as the Globe’s State House bureau chief in the late 1980s. He also reported for the Globe’s Spotlight Team, winning a Loeb award in 1992 for coverage of conflicts of interest in the state’s pension system. He served as the Globe’s political editor in 1994 and went on to cover consumer issues for the newspaper. At CommonWealth, Bruce helped launch the magazine’s website and has written about a wide range of issues with a special focus on politics, tax policy, energy, and gambling. Bruce is a graduate of Ohio Wesleyan University and the Fletcher School of Law and Diplomacy at Tufts University. He lives in Dorchester.
About Bruce Mohl
Bruce Mohl is the editor of CommonWealth magazine. Bruce came to CommonWealth from the Boston Globe, where he spent nearly 30 years in a wide variety of positions covering business and politics. He covered the Massachusetts State House and served as the Globe’s State House bureau chief in the late 1980s. He also reported for the Globe’s Spotlight Team, winning a Loeb award in 1992 for coverage of conflicts of interest in the state’s pension system. He served as the Globe’s political editor in 1994 and went on to cover consumer issues for the newspaper. At CommonWealth, Bruce helped launch the magazine’s website and has written about a wide range of issues with a special focus on politics, tax policy, energy, and gambling. Bruce is a graduate of Ohio Wesleyan University and the Fletcher School of Law and Diplomacy at Tufts University. He lives in Dorchester.
Brostrom said the company’s 50-50 partnership in Massachusetts with Eversource Energy would remain in place, and he said he would even like to see it expand.
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