Ireland's Greencoat takes 50% stake in 312-MW German offshore wind farm

Greencoat Renewables has agreed to buy a 50% stake in the 312-MW Borkum Riffgrund 1 offshore wind farm in Germany for Eur350 million ($386 million), the Irish investment company said April 4.

German offshore wind capture prices were last assessed by S&P Global Commodity Insights at Eur208.97/MWh ($230.29/MWh) March 31, and are averaging Eur184.12/MWh in the year to date.

"The wind farm benefits from a fixed-price CfD [contract for difference] until September 2024," Greencoat said. "After this period, the project benefits from a government-backed floor price for the electricity sold until May 2035. This provides exposure to power price upside as well as the emerging European corporate PPA market opportunity."

It is buying the stake from Kirkbi AS (31.5%) and William Demant Invest AS (18.5%). The wind farm was built by Orsted, which remains a 50% shareholder. It has been operational since 2015.

Orsted is to continue to provide operation, maintenance and management services to the wind farm under a long-term contract.

"We believe that offshore wind is key in allowing governments to reach their decarbonization objectives and we see a circa 63 GW investment opportunity across our selected jurisdictions by 2030," Greencoat Investment Manager Bertrand Gautier said.

In its latest long-term forecast published March 29, S&P Global said that by 2050, comparatively high load factors for offshore wind combined with increasing deployment would combine to increase wind's overall role in the EU10's generation mix to almost 50%.

"In markets with strong wind resource and high offshore capacity installation ambitions, such as GB, generation could increase to around 65% of the mix by 2050, up from 26% in 2023," it said.

Cannabilization would see German offshore wind capture prices drop to 84% of wholesale prices by 2030, the report forecast, putting market returns at Eur48.20/MWh that year.