Enbridge Inc., the pipeline operator hunting for European renewable energy investments, is bulking up its offshore wind assets by acquiring stakes from DONG Energy.Fred Lum/The Globe and Mail
Enbridge Inc., the pipeline operator hunting for European renewable energy investments, is bulking up its offshore wind assets by acquiring stakes from DONG Energy A/S in three farms located off France's coast for $282-million.
The Canadian company plans to acquire a 50-per-cent stake in Eolien Maritime France SAS, which is developing the offshore farms with 1.4 gigawatts capacity, Calgary-based Enbridge said in a statement on Tuesday. Enbridge will acquire DONG's 40-per-cent stake in Éolien, along with a 10-per-cent stake held by project co-owner, Électricité de France SA. Financial close on the projects could come as early as this year.
The deal is Enbridge's second investment in European offshore wind. In 2015, it paid $750-million for a 25-per-cent stake in EON SE's 400-megawatt Rampion project off the coast of Sussex, England. The company last month called Europe its most attractive market for renewable energy projects because governments are supporting investment with attractively priced long-term contracts. It plans to spend about $5-billion to double its renewable energy capacity by 2019.
"This investment in EMF advances our priority to build new business platforms that will extend and diversify growth," said Al Monaco, president and chief executive of Enbridge, in a statement.
Two of the French projects – Hautes Falaises and Calvados – will be installed off the north coast, in the English Channel, while the third, Parc du Banc de Guérande, will be located off the coast of Saint-Nazaire, near Nantes. Enbridge said it would potentially invest as much as $4.5-billion for all three projects if they reach financial close. The farms would then take about four years to build, with the last project completed in 2022.
"This is part of our project to double our renewable capacity by 2030," said Antoine Cahuzac, chief executive of EDF Énergies Nouvelles, during a news conference. The company has already agreed to buy the power from the projects during their 20-year lifetime, paying an indexed fixed price, according to the statement.
All three wind farms will have feed-in tariffs below €200 ($293) per megawatt hour, said Beatrice Buffon, deputy chief executive of EDF's clean energy unit Énergies Nouvelles, at the news conference. Each wind farm will represent an investment of about €2-billion, she said.
"When entering into offshore wind projects, we prefer to be in the lead of the development, construction and operation," DONG said in an e-mailed statement. "That was not the case in this specific joint venture, but we still consider France an attractive market for offshore wind."