Each week, Power Technology’s editors select a deal that illustrates the themes driving change in our sector. The deal may not always be the largest in value or the highest profile, but we select it because of what it tells us about where the leading companies are focusing their efforts, and why. We pick apart the deal itself and the industry theme behind it. This new, thematic deal coverage is driven by our underlying Disruptor data, which tracks all major deals, patents, company filings, hiring patterns and social media buzz across our sectors.
The deal
UAE state-owned renewable company Masdar will acquire 49% of the Baltic Eagle wind farm from Spanish renewable company Iberdrola.
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Why it matters
Europe’s energy transition is progressing rapidly. In order to meet approaching climate goals, countries must invest in and scale up renewable energy projects. The investment into the Baltic Eagle wind farm can expedite its completion, meaning an annual saving of as much as 725,000 tonnes of CO₂ per year.
The Baltic Eagle wind farm has an expected annual production capacity of 1.9 terawatt-hours from its 50 9.53MW turbines. It is now scheduled for completion by the end of 2024 and 100% of its production has already been contracted out to long-term buyers.
For the first 20 years of its life, the project is subject to a minimum regulated tariff of $72 per megawatt-hour. With 100% of its production already sold, it means an annual return of $136.8m (Dh500.86m).
Dr Sultan Al Jaber, Masdar chairman, stated: “This landmark agreement between Masdar and Iberdrola will harness Germany’s abundant wind power in the Baltic Sea and bring electricity to nearly half a million homes, while cutting emissions.”
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By GlobalDataAl Jaber, the COP28 President-Designate, continued: “As the UAE looks ahead to hosting COP28, partnerships such as this show how we can hold back emissions, without holding back progress.”
The UAE and Germany signed an Energy Security and Industry Accelerator (ESIA) agreement in 2022 to encourage collaboration on energy security and renewable energy projects. This purchase is a contribution to that agreement. The ESIA included provisions for Masdar to have purchase opportunities in German offshore wind, which it has now exercised.
The detail
Masdar paid Iberdrola €375m ($414.5m) in exchange for 49% of the Baltic Eagle wind project. According to the terms of the deal, the entirety of the wind project is valued at €1.6bn.
Masdar will contribute to the development of the 50-turbine wind farms proportionally to its stake in the project. Iberdrola, however, will maintain control of the wind farm and “manage the asset, providing operation and maintenance services and other corporate services”.
