Northland Power could invest € 13 billion in offshore wind in next five years

Over the next five years, Northland Power could invest between at least CAD 15 billion and CAD 20 billion (between EUR 9.8 billion and EUR 13 billion) in new offshore wind projects in which it holds ownership shares, with offshore wind being an anchor for its next phase of growth in the renewable energy sector.

On 4 February, the Canadian company issued an update on its long-term plans and said that it was at an inflection point given the accelerating global trend towards de-carbonisation and electrification, and its extensive portfolio of offshore wind development.

“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”, said Pauline Alimchandani, Northland’s Chief Financial Officer. “These projects have the potential to more than double our adjusted EBITDA from current levels, once commercially operational”.

Northland currently has over 1.2 GW of gross offshore wind operating capacity and an additional 4 to 5 GW of gross capacity in projects under development: Hai Long in Taiwan, Chiba in Japan, Dado Ocean in South Korea, Baltic Power in Poland, and Nordsee Two/Three in Germany.

“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”, said Mike Crawley, Northland’s President and Chief Executive Officer. “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”.

Offshore wind is the largest segment of Northland’s business and is expected to account for over 60 per cent of its 2020 adjusted EBITDA.

Along with offshore wind as a focal point of its growth strategy, the company is also targeting new opportunities in onshore renewables, utilities and transmission, as well as entering clean fuel and energy storage sectors. In these areas of business, Northland also sees potential synergies between its renewable assets and hydrogen production.

“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”, Pauline Alimchandani said.