Northland deal affects Senvion

Canada’s Northland Power has acquired a controlling equity stake in three German offshore wind projects from RWE Innogy, with potentially big consequences for Senvion, the Suzlon-owned German turbine supplier.

Innogy, the renewables arm of ailing German utility RWE, on Thursday announced that it had sold an 85% stake in its Nordsee One, Two and Three projects, as it embraces a “capital light” strategy that will see it adopt something closer to a project developer model.

The deal further cements Toronto-based Northland’s position as emerging global offshore wind heavyweight, following its purchase a year ago of a majority stake – since upped to 60% – in the 600MW Gemini project being built in the Dutch North Sea.

The RWE Innogy deal increases Northland’s net offshore wind capacity under development to 642MW, “with further growth potential in subsequent phases”.

Both Gemini and the 332MW Nordsee One are expected online by the end of 2017. Nordsee Two and Three, totaling 670MW, are in the early stages of development, and will be brought online over the next decade “as offshore wind tariffs are extended and the grid infrastructure is made available”, RWE says.

The deal means that Northland will get a say in which turbines are used at Nordsee One, with Senvion hugely affected by the decision.

RWE Innogy had originally “pre-selected” Senvion to supply 54 of its 6.2M-126 turbines to Nordsee One, but a deal was never finalised.

Earlier this year, RWE Innogy decided to re-tender the project after a technical hitch relating to bearings was found in a handful of Senvion's flagship 6.2 MW turbines.

RWE Innogy said the re-tender was only a “fallback option”, with Senvion apparently in the position of being able to clinch the order if it can demonstrate the problem has been fixed.

Senvion has assured Recharge that a technical fix for the problem has been found and will have been thoroughly tested before the end of RWE's re-tendering process.

With Nordsee One having been developed and designed with Senvion machines in mind, changing turbines would likely add significant cost to the project.

RWE today told Recharge that it plans to announce the result of the re-tender by the end of September – with the decision to be taken jointly with Northland. Senvion has confirmed it is taking part in the re-tender.

Northland Power, which is listed on the Toronto Stock Exchange, did not immediately respond to questions regarding the project.

Beyond the turbine portion of the project, the developers are “nearing completion” with all other major supply and construction contracts, with a financial investment decision to be taken early next year, and in-water construction to commence in 2016.