Copenhagen – Danish renewable energy giant Ørsted has announced that it has sold a 24.5% stake in an offshore wind farm in the UK to a fund managed by Schroders Greencoat for approximately £456 million (US$606 million). Behind this transaction lies a profound transformation of the global offshore wind power market landscape and the dynamic adjustment of corporate strategies.
As a leader in the global development of offshore wind power, Ørsted has been making frequent moves in optimizing its asset structure in recent years. Previously, in March 2022, Ørsted sold a 50% stake in its 1.32GW Hornsea 2 offshore wind farm to a consortium of financial institutions consisting of AXA IM Alts, the alternative investment arm of AXA Group, and Credit Agricole Assurances. In July 2023, it sold the last 25% stake in the London Array, once the world’s largest offshore wind farm. The sale of the stake in the West of Duddon Sands wind farm is another important step in its asset divestment strategy. Judging from Ørsted’s financial statements, in recent years, affected by factors such as rising costs of offshore wind power projects and supply chain issues, the company’s asset-liability ratio has increased, and it has faced significant financial pressure. Through this series of asset sales, the company can effectively recover funds, reduce its debt level, and optimize its financial structure.
After the sale of the stake, Ørsted will retain a 25.5% stake in the West of Duddon Sands project on the west coast of the UK and continue to operate the 389-megawatt wind farm. Currently, the global offshore wind power market is highly competitive. The prices of raw materials fluctuate wildly like a roller coaster, the stability of the supply chain has been severely impacted, and the policy environment is also full of uncertainties, casting a shadow over the development of the industry. Against this backdrop, Ørsted’s sale of some of its stakes can, on the one hand, recover funds and effectively relieve financial pressure; on the other hand, it can focus on core assets, optimize the investment layout, and enhance overall operational efficiency and risk resistance. Take the emerging offshore wind power market in Southeast Asia as an example. The region is rich in offshore wind energy resources, and many countries have formulated ambitious renewable energy development goals, indicating huge market potential. Ørsted can use the funds obtained from the sale of the stake to conduct in-depth research and enter these markets. Through cooperation with local enterprises, it can quickly improve the situation and achieve a diversified business layout.
Trond Westlie, Ørsted’s Chief Financial Officer, said in a statement that this transaction is in line with the company’s strategic objectives in terms of value creation, risk diversification, and capital recovery. According to industry analysis, through this transaction, Ørsted can not only obtain substantial cash flow to relieve financial pressure but also invest the funds in the development of more promising new projects, further consolidating its leading position in the global offshore wind power field. For example, in some emerging regions rich in offshore wind power resources, Ørsted is expected to take advantage of its capital strength to make early deployments and expand its business territory. Judging from its past project development experience, in the early planning stage of a project, Ørsted will invest a large amount of resources in wind resource assessment, technology selection, and other work to ensure that the project has good economic viability and sustainability. With the financial support brought by this transaction, Ørsted can be more confident in the development of new projects and is expected to create more benchmark offshore wind power projects.
The transaction was completed on April 30. The West of Duddon Sands offshore wind farm is located about 14 kilometers off the west coast of the UK and has been in operation since 2014. The project has installed a total of 108 Siemens Gamesa 3.6-megawatt wind turbines and is located in the Irish Sea, close to the Cumbrian coastline. Since its operation, the wind farm has provided a large amount of clean energy for the UK, effectively helping the local area achieve its carbon neutrality goal. In the process of the UK vigorously promoting energy transformation and reducing carbon emissions, the West of Duddon Sands wind farm plays an indispensable role. Its stable power output is of great significance for ensuring the UK’s energy supply and optimizing its energy structure. The UK government has been committed to increasing the proportion of renewable energy in its energy structure and plans to increase the installed capacity of offshore wind power to 50GW by 2030. As an important part of the UK’s offshore wind power development, the continuous and stable operation of the West of Duddon Sands wind farm provides strong support for the UK to achieve this goal.
The total net power generation capacity managed by Schroders Greencoat exceeds 7 gigawatts, and the assets under management amount to £9.6 billion. The company is also a partner of Ørsted in four other offshore wind farms, namely Walney, Burbo Bank Extension, Hornsea 1, and Borkum Riffgrund 1. This acquisition reflects Schroders Greencoat’s continued optimism about the UK offshore wind power market. By increasing its stake in the West of Duddon Sands wind farm, the company is expected to further expand the scale of its clean energy assets and enhance its influence in the field of green energy investment. Schroders Greencoat can take this opportunity to deeply tap the operational potential of the West of Duddon Sands wind farm, accumulate more experience in offshore wind power project management, and lay the foundation for laying out more high-quality projects globally in the future. Judging from Schroders Greencoat’s past investment strategies, it focuses on the long-term stability and sustainability of investment projects. The West of Duddon Sands wind farm has been in operation for many years, with stable cash flow and a good operational record, which is in line with its investment preferences. By increasing its stake this time, Schroders Greencoat can better integrate resources, improve project operational efficiency, and achieve the preservation and appreciation of assets.
From the perspective of the global offshore wind power market, according to the market analysis report released by RenewableUK, the global installed capacity of offshore wind power exceeded 80.9 gigawatts for the first time in 2024, showing a significant increase compared with 70.2 gigawatts a year ago. China and the Netherlands accounted for 63% of the total newly added offshore wind power capacity in 2024, with China adding 6.9 gigawatts and the Netherlands adding 1.7 gigawatts. In 2021, China for the first time accounted for more than half of the total capacity of the industry, reaching 41 gigawatts. Currently, with a cumulative grid-connected installed capacity of 43GW, it accounts for 51.3% of the global market share and has ranked first in the world for the fourth consecutive year. The UK currently ranks second with an installed capacity of 14.7 gigawatts. In such an industry development trend, the transaction between Ørsted and Schroders Greencoat will undoubtedly have an impact on the competition pattern of the UK and even the global offshore wind power market. Other companies may re-examine their asset allocation and development strategies. Some companies may accelerate asset integration to enhance their market competitiveness, while some emerging companies may also find cooperation opportunities from this and enter the UK offshore wind power market.
Recently, the UK government has made significant adjustments to its wind power policies to accelerate the development process of the wind power sector. On July 5, Keir Starmer, the leader of the UK Labour Party, was officially inaugurated as the Prime Minister of the UK. Less than a week after taking office, Keir Starmer announced the cancellation of the restrictive policy on onshore wind power development. This policy was proposed by the then Conservative government in 2015 and effectively banned onshore wind power development, resulting in almost no new onshore wind farm projects in the UK since 2015. On July 9, UK Chancellor of the Exchequer Rachel Reeves announced that the UK government has newly established a £7.3 billion “National Wealth Fund” to support the development of the green economy, including low-carbon energy transformation projects such as green steel and green factories. This fund will be continuously invested by the UK Infrastructure Bank over the next five years, providing strong financial support for the UK’s wind power industry. The UK government has also established a company called Great British Energy (GBE). The Labour Party emphasizes that this company will play an important role in helping the UK’s energy transformation. The UK Crown Estate will cooperate with GBE and plans to develop new offshore wind power projects with a capacity of 20 – 30GWe by 2030. Against this policy background, the transaction between Ørsted and Schroders Greencoat is in line with the general direction of the development of the UK’s offshore wind power industry and is expected to further tap the project’s potential and increase project returns with the support of policies.
Although the offshore wind power industry has encountered a short-term setback, the industry generally believes that offshore wind power will still be an important part of the future energy system, and countries still attach great importance to it. In the long term, the growth outlook for the global installed capacity of offshore wind power remains very optimistic. The latest data released by the energy industry research institution TGS-4C shows that although some projects have encountered setbacks, the global investment scale in offshore wind power still reached a record high in 2023, and the installed capacity of offshore wind power projects with financing decisions globally reached as high as 12.3 gigawatts. Recently, offshore wind power giant Ørsted announced that it will continue to promote the Hornsea 3 project in the North Sea and is expected to complete it around the end of 2027. The Hornsea 3 offshore wind power project is located in the North Sea off the UK, about 160 kilometers from the coast of Grimsby, with a planned installed capacity of 2.9GW. It is one of the largest offshore wind power projects in Europe and can provide sufficient electricity for more than 3.3 million British households after it is put into operation. The Dogger Bank offshore wind farm is also one of the important offshore wind power projects in the UK, with a total installed capacity of 3.6GW. The first three phases, A, B, and C, are planned to consist of 277 wind turbines. It is understood that the project is currently progressing smoothly and is expected to provide a large amount of clean energy for the UK. In addition, the UK Crown Estate announced that it will launch the fifth round of seabed use rights auction process for offshore wind power in the UK, and plans to grant the sea use rights for 3 commercial-scale floating offshore wind power projects in the Celtic Sea off South Wales and the Southwest of England, with a combined installed capacity of 4.5GW. In such an industry development trend, the cooperation between Ørsted and Schroders Greencoat is expected to ride the wave of industry development to achieve mutual benefit and win-win results, and inject new vitality into the development of the global offshore wind power industry.
Through this transaction, Ørsted continues to advance its asset divestment plan, further optimizes its investment portfolio, and at the same time strengthens its cooperative relationship with Schroders Greencoat. In the future, the two sides may carry out in-depth cooperation in more offshore wind power projects and jointly promote the development of the global offshore wind power industry. With the completion of the transaction, the competition pattern of the UK offshore wind power market will also witness new changes, and other companies may adjust their development strategies according to the trend of this transaction.
