Carney’s Brookfield takes stake in UK offshore wind farms

The asset management group chaired by Mark Carney, the former governor of the Bank of England, has acquired a minority stake in four UK wind farms owned by the world’s largest offshore wind developer in one of the largest deals for the sector this year.
Brookfield will pay $2.3 billion, or £1.75 billion, to Orsted for a 12.45 per cent in the assets, which are already operational and include Hornsea 1 and 2 and have a combined capacity of 3.5 gigawatts.
Hornsea 2, in the North Sea about 55 miles off the Yorkshire coast, is the world’s largest single wind development, with a capacity of 1.32GW, enough to power about 1.4 million homes.
The stake sales are part of plans set out in February by Orsted to reduce costs and strengthen its balance sheet; the plans also included scrapping some projects to conserve capital. The deal with Brookfield equates to about 20 per cent of the disposal proceeds being targeted by Orsted by 2026, according to analysis by Jefferies, the investment bank.
The sector has been hit by higher interest rates, which have made projects less profitable, and supply chain shortages. Iain Scouller, an analyst at Stifel, said that listed renewables funds were vulnerable to takeovers because of subdued valuations but that the Orsted deal “may highlight another route that investors can use, ie buying individual assets rather than going through the complexity of bidding for listed funds”.
• Orsted leaving the doldrums as wind farms power up
Mads Nipper, chief executive of Orsted, said the deal was an “important milestone in the farm-down program as part of our business plan, supporting our significant re-investment in new assets”.
The Danish renewables group operates more than 5GW of offshore wind capacity and has an additional 5GW under construction or in development, including Hornsea 3 and 4, which secured contracts in this year’s government clean power auction.
The government, which is aiming to quadruple the UK’s offshore wind capacity by the end of the decade, increased the budget for this year’s bidding round to a record £1.5 billion. Developers had complained that the previous budget was too small to cover the risk of electricity prices falling sharply, which meant that last year’s auction failed to secure any bids.
Labour has put accelerating the drive to net zero by 2050 at the centre of its early legislative agenda since winning the general election in July. Its measures have included lifting the ban on onshore wind; launching Great British Energy, backed by £8.3 billion of taxpayers’ money; and moving to allow the Crown Estate to borrow to invest in green energy projects.
Rachel Reeves, the chancellor, said: “This investment is a huge vote of confidence in the UK’s clean energy sector, and is exactly the kind we want to see as we grow the economy. That’s what the International Investment Summit was all about. Showing global investors and business that Britain is open for business.”
The deal is the first by Brookfield in the UK offshore sector.
Last year, Brookfield made its entrance into the UK wind market by acquiring Banks Renewables, the Durham-based clean power company that it has since rebranded OnPath, which operates 11 onshore wind farms across Yorkshire, the northeast, the northwest and Scotland.
The asset management group already owns wind farms with a combined capacity of 11.1GW, more than half of which is in North America.
Connor Teskey, chief executive of Brookfield Renewables, said that UK offshore wind farms were “a critical part of the energy mix”.