Orsted, the world’s largest offshore wind developer, said on Monday it would buy U.S.-based Deepwater Wind LLC for $510 million as part of its strategy to expand in a major growth market.
The still small U.S. offshore wind sector is seen as one of the most important markets outside the core European region, where subsidies that have underpinned the industry since the early 1990s are starting to be wound back.
Deepwater Wind, the builder of the only operating U.S. offshore wind farm, has a portfolio with a capacity of around 3.3 gigawatts (GW).
Orsted’s U.S portfolio currently has a capacity of 5.5 GW.
Orsted has so far lost out on auctions in the nascent market, while Deepwater Wind has been more successful and currently has the right to develop wind farms in Rhode Island, New York and Connecticut.
“With this transaction we’re creating the number one offshore wind platform in North America,” Orsted’s offshore wind chief Martin Neubert said in a statement.
The drive to open America’s offshore wind industry has attracted Europe’s biggest renewable energy companies, who see the U.S. East Coast as a new frontier after years of success across the Atlantic.
Orsted said the acquisition increased its capital expenditure guidance to 23-25 billion Danish crowns ($3.55-3.86 billion) this year from previous guidance of 16-18 billion.
The new guidance includes the acquisition price of Deepwater Wind, early capex commitments for the U.S. business in the fourth quarter, “as well as increased spending in the remaining portfolio due to timing”.
Orsted also recently acquired U.S. onshore wind developer Lincoln Clean Energy.