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Northland Power outlines offshore wind plans

By: Tom Russell 05/02/2021 Northland Power

Corporate General

Northland Power Inc. (Northland) has issued an update on its long-term plans and objectives as well as providing its 2021 financial outlook.

Over the next decade, the global transition to renewable energy is expected to accelerate as decarbonisation efforts by governments and private entities increase alongside further electrification. Northland stated that it is strategically positioned to compete in this global transition and further grow its global portfolio and market share.

The company has advanced and secured the rights to a number of offshore projects, which if successful will increase Northland’s installed gross capacity by at least 4 to 5 GW and require approximately $15 to $20 billion ($10 to $14 net) of total gross capital investment over the next five years. These projects, once operational by the latter half of the decade, are expected to more than double the company’s adjusted EBITDA, after taking into account the Company’s ownership share.

“Northland’s deep expertise in renewables development combined with its established offshore wind capabilities and portfolio pipeline in Europe and Asia positions us to capture an outsized share of the renewable energy transition opportunities going forward,” said Mike Crawley, Northland’s President and Chief Executive Officer. “Offshore wind is a focal point of our strategy with over 1.2 gigawatts (GW) of gross offshore wind operating capacity and an additional 4 to 5 GW of gross capacity of identified projects under development, we are now a top ten global offshore wind owner and developer. Our growth aspirations are much larger than this and we have amassed a total pipeline of approximately 12 GW of gross offshore wind capacity globally. Pursuing offshore wind projects provide us the opportunity to deploy significant capital to generate attractive returns on assets underpinned by long-term, government backed revenue contracts. We are very excited to embark on the next growth chapter at Northland where we expect to execute on our development projects adding significant incremental operating capacity, furthering the global shift to a carbon free world.”

Pauline Alimchandani, Northland’s Chief Financial Officer, said: “Northland continues to position itself for future growth and expects its strategy will continue to generate growing shareholder value over the coming years. The next growth inflection point for Northland offers the opportunity to deploy at least $15 to $20 billion of gross capital investment into new renewable projects over the next five years, anchored by identified offshore wind projects that are currently in active development. These projects have the potential to more than double our adjusted EBITDA1 from current levels, once commercially operational. In addition, we are targeting new opportunities in onshore renewables, utilities and transmission as well as establishing a position in renewable fuels and energy storage. Our allocation to utilities and transmission is targeted to account for approximately 10 to 15% of our adjusted EBITDA over time. This should enable Northland to maintain solid and diversified cash flows thereby supporting a strong balance sheet and credit rating to fund expenditures related to our core focus of securing and developing offshore wind development assets.”

Offshore wind is the largest segment of Northland’s business and is expected to account for over 60% of its 2020 adjusted EBITDA. It has supported the development, construction and operation of its first three offshore wind projects in Europe over the past six years. The Company considers its offshore wind resources to be a key asset not only in developing new projects but also in securing new partnerships, such as the recently announced 1,200 MW Baltic Power project located off the coast of Poland in the Baltic Sea, to be developed with PKN ORLEN.

Northland outlined plans to augment its existing pipeline of offshore opportunities by securing interests in early stage projects in key target markets in Asia and Europe, through greenfield development, and by seeking long-term offtake agreements with creditworthy entities to generate strong returns and stable cash flows.

Northland also aims to increase its position and footprint in Asia. Current development activities are focused on advancing the 1,044 MW Hai Long, the 600 MW Chiba and the 1,000 MW Dado Ocean projects in Taiwan, Japan and South Korea, respectively. In addition, Northland is pursuing feasibility-stage development in the markets above and is considering additional market entry.

Beyond its Identified Development Projects, Northland claims that it has built a robust pipeline of opportunities in offshore wind with the potential to add an incremental 12 GW of gross capacity. Successful execution of these projects are expected to deliver incremental contracted cash flows starting in the latter half of this decade and is expected to further bolster Northland’s long-term business sustainability, extending into the 2040s and 2050s.

For more information on offshore wind farms worldwide, click here.

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Northland Power outlines offshore wind plans

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