Iberdrola Boosts Stake in U.S. Assets in Offshore-Wind Bet
Iberdrola Boosts Stake in U.S. Assets in Offshore-Wind Bet
(Bloomberg) -- Spanish utility Iberdrola SA said it’s stepping up investments in U.S. offshore wind, taking greater control of projects along the East Coast where it plans to pour in about $12 billion.
Under an agreement with Copenhagen Infrastructure Partners, Iberdrola’s Avangrid Renewables unit will take full ownership of Park City Wind, an 804 megawatt project, and Commonwealth Wind, which has the potential for 1,200 megawatts, the utility said in a statement Tuesday. Vineyard Wind 1, the first utility-scale offshore wind farm in the U.S., will remain a joint venture between the companies and is slated to start construction this month.
Offshore wind is a key part of President Biden’s plan to stem climate change by purging planet-warming fossil fuels from U.S. electricity generation. While the U.S. lags far behind Europe in wind energy, the reshuffling by Iberdrola shows how the nation’s offshore wind market has strengthened since Avangrid and Copenhagen teamed up in 2017, with less need for joint ventures that spread out financial risk, said Lucas Stavole, analyst at Wood Mackenzie.
“Now that things are more certain they don’t have to worry about projects not getting permitted or falling apart,” Stavole said, citing federal support, state goals and supply-chain agreements. “It does show that the fundamentals are there for offshore wind in the U.S.”
Iberdrola’s Avangrid unit will pay Copenhagen $167.5 million and will have an option to gain operation control of Vineyard Wind once it’s built. Under the agreement, Copenhagen will take ownership of a nearby lease area.
The deal is subject to regulatory and stakeholder approval and is expected to close in about six months.
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