Business, Feature, Freight News

Ørsted Divests U.S. Onshore Assets

[ March 22, 2024   //   ]

Ørsted said March 13 that it agreed to divest to alternative investment firm Stonepeak on equity ownership stake in a portfolio consisting of four U.S. onshore wind farms, as part of a “farm-down program.
The transaction is valued at about US$300 million, and Ørsted has previously raised about US$700 million in tax equity proceeds for the portfolio, bringing the total proceeds raised to about US$1 billion.
The four windfarms, which have a total capacity of 957 megawatts, are across three markets: the Electric Reliability Council of Texas, Midcontinent Independent System Operator and Southwest Power Pool. The farms are located across three states – the Ford Ridge Wind project in Illinois; the Helena Wind and Western Trail Wind projects in Texas; and the Sunflower Wind project in Kansas.
The projects are all operational and have power purchase agreements in place for all or parts of the production capacity. Ørsted will be the managing member of the partnership and will provide asset management services to the projects.
Ørsted has a portfolio of nearly 6 gigawatts of onshore wind, solar and battery storage projects in operation and under construction in the U.S.
Stonepeak, which specializes in infrastructure and real assets, will receive 80 percent of the cash distributions associated with the projects, while Ørsted will continue to operate the portfolio of assets.


The deal represents the company’s first partnership with Stonepeak and the second major farm-down of multiple U.S. assets.
Under Ørsted’s farm-down approach, also known as asset rotation or build-sell-operate, ownership shares of existing operating assets are divested in order to recycle and redeploy capital for future value-creating projects.
“This deal signifies the value that our U.S. onshore renewable energy projects can deliver to our investors while also demonstrating the holistic and flexible approach we take to partnerships and divestments,” said David Hardy, executive vice president and CEO of Regional Americas at Ørsted. “While Ørsted will continue to operate each asset over its lifetime, we’ll use this capital to fund projects that continue to create the most value for our stakeholders and fuel our growth in the renewable energy sector.”
Ørsted in October 2022 divested a 50-percent ownership stake in a portfolio of three onshore wind farms and one solar far in the U.S. to Energy Capital Partners, an energy transition-focused investor, for about US$410 million.
The portfolio, comprised of onshore wind farms Lincoln Land Wind, Plum Creek Wind and Willow Creek Wind and the solar farm Muscle Shoals is diversified across four U.S. states (Illinois, Nebraska, South Dakota and Alabama) and three markets (MISO, SPP North and TVA) representing total capacity of 862 MW.

‘Meaningful and Positive’
“Ørsted’s U.S. onshore assets are young and have been built with trusted technology, which gives us confidence in their potential to make a meaningful and positive long-term impact on the communities they serve,” said Anthony Borreca, senior marketing director at Stonepeak. “We look forward to partnering closely with Ørsted on this highly contracted, geographically diverse portfolio.”
Denmark-based Ørsted develops, constructs and operates offshore and onshore wind farms, solar farms, energy storage facilities, renewable hydrogen and green fuels facilities, and bioenergy plants.
Stonepeak, based in New York has about US$61.1 billion in assets under management. As sponsor of private equity and credit investment vehicles, Stonepeak provides capital, operational support and partnership to grow investments in its target sectors, which include communications, energy and energy transition, transport and logistics, and real estate.

The Stonepeak deal is Ørsted’s second “farm-down” transaction. Photo: DARIN EPPERLY/AP/Press Association Images/NTB