Northland Power Inc. has completed financing on a $4.2-billion deal to build Europe's largest offshore wind farm in the North Sea off the Netherlands, and is looking for more opportunities to build offshore wind projects in Europe and North America.
The Toronto-based power company owns 60 per cent of the 600-megawatt Gemini project, with Siemens AG owning 20 per cent and two Dutch firms – Van Ord Dredging and Marine Contractors BV and N.V. HVC, a leading utility company – owning 10 per cent each. Construction has already begun on the project.
The TSX-listed Northland will make a total investment in the project of $565-million Canadian, including equity and debt.
"Today's announcement is a major achievement for Northland," chief executive officer John Brace said in an interview Thursday.
"We would certainly hope that in the long run, this is the beginning of Northland's activity in the offshore industry. We think there is great promise for the industry."
The project represents the largest project financing in the offshore wind sector, and signals Northland's evolution from an Ontario-based power producer that grew out of the forestry sector, to an international company with world-scale ambitions.
The Gemini facility will benefit from Netherlands' renewable power subsidies under a 15-year contract. It will contribute to the European Union's Renewable Energy Directive, which calls on member states to reach a 20-per-cent share of energy from renewable sources by 2020.
Renewable subsidies have become increasingly controversial in Europe, as countries such as Spain and Germany have reduced their support over concerns about rising prices and increased government debt. Some business leaders have complained that the rising cost of electricity is undermining European competitiveness.
"I think Europe's level of commitment [to renewables] is pretty high," Mr. Brace said. "Generally speaking, in spite of whatever ups and downs may be going on, the Europeans are generally more attuned to global warming issues than North Americans and are more desirous of doing something about it."
He said the crisis in the Ukraine has focused European attention on its level of energy dependency on Russia, and to value domestic sources of energy.
Northland – with revenue of $557-million in 2013 – has most of its generation and projects under development in Canada. It generates 1,300 megawatts of power, with plants that are run on gas, hydro, biomass, wind and solar.
(Editor's note: An earlier online version of this story incorrectly stated Siemen's ownership stake of the Gemini wind project and Northland's 2013 revenue.)