Orsted has entered into an agreement to acquire US-based developer and operator of onshore windfarms, Lincoln Clean Energy (LCE) for $580 million (£450 million).
The Danish energy company made the announcement as it published “strong results” in its financial report for the first half of 2018.
The company said it achieved operating profit earnings before interest, taxes, depreciation, and amortisation (Ebitda) of DKK 8.6 billion (£1.3 billion), up 11 per cent compared to the same period last year.
This was, Orsted said, partly due to a 32 per cent increase in operating profits from windfarms in operation.
The share of green generation increased from 59 per cent in H1 2017 to 71 per cent in the first six months of this year.
Orsted, formerly known as Dong Energy, says it now sees full-year Ebitda excluding new partnerships skewing towards the upper end of the guidance range of DKK 12.5-13.5 billion.
The company added it is likely to divest 50 per cent of Hornsea 1, a windfarm off the coast of the UK in the North Sea, during the second half of 2018. Should this divestment materialise in H2 of 2018 the company expects Ebitda, including new partnerships, to be significantly higher than the DKK 22.5 billion achieved in 2017.
Orsted’s chief executive Henrik Poulsen, said: “We commissioned the world’s largest offshore windfarm in operation, Walney Extension, in May, well ahead of schedule, and at Borkum Riffgrund 2, we installed the first wind turbines.
“We secured 2.4GW of offshore wind projects in competitive processes in Germany and Taiwan. In April and June, we were awarded a total of 1,820MW offshore wind capacity in Taiwan and have now secured a market leading platform for continued growth in Asia.
“In the auction in Germany in April, we were awarded an additional 552MW of offshore wind capacity. In combination with the awards from the auction last year, we’ve secured a total capacity of 900MW in the Borkum Riffgrund cluster without subsidy. In addition, we have secured a total capacity of 242MW for Gode Wind 3 & 4 with a weighted average subsidy of EUR 81 per MWh.
“Assuming we take final investment decision on the awards in Taiwan and Germany, our total decided and installed capacity will reach 11.9GW by 2025.”
Shifts in spending across years and the Race Bank and Walney Extension construction projects being finalised at a lower capex spend than expected have been attributed to the outlook for gross investments remaining unchanged, relative to the annual report for 2017.
The report added reduced 2018 spend on offshore wind construction projects is offset by the expected payment related to the acquisition of Lincoln Clean Energy.
Quarter two of 2018 saw profits decrease compared to the same time last year by 31 per cent to DKK 3.1 billion. This was expected and was primarily due to a deferred gain of DKK 1.4 billion in Q2 2017 regarding the 2016 Race Bank farm-down, as well as lower earnings in Orsted’s Markets business, the company said.
Q2 also saw profits rise from offshore windfarms in operation by 8 per cent to DKK 1.8 billion, primarily due to a ramp-up at Walney Extension and Race Bank. This was partly offset by lower wind than in Q2 2017.
Orsted said LCE has an “attractive portfolio” of 513MW recently commissioned, 300MW under construction, and more than 1.5GW of pipeline to be completed by 2022.
“The acquisition of LCE will provide a strong growth platform in the US, which is one of Orsted’s strategic growth markets. It is an investment case with healthy economics based on prudent assumptions about key value drivers and market developments,” the company said.