RWE AG, a German energy group, has finalised the purchase of the 4.2 GW Norfolk offshore wind zone portfolio in the UK from Swedish utility Vattenfall AB. The three 1.4 GW fully consented projects in the Norfolk zone are Norfolk Vanguard West, Norfolk Vanguard East, and Norfolk Boreas, all of which are situated off the coast of Norfolk in East Anglia. All of Vattenfall’s team in Norfolk will also join RWE as part of the agreement, which was announced at the end of 2023.
The Norfolk Vanguard West and Norfolk Vanguard East projects are further along, with the majority of important components already procured. RWE stated that the next step in their development is winning a contract for difference (CfD) in one of the next auctions. Additionally, RWE intends to resume the previously halted Norfolk Boreas project development. It will seek to finalise supplier agreements for all essential parts and, at a later time, take part in a CfD auction alongside the project.
Vattenfall stated that the deal ensures the Norfolk zone’s continuing growth, which will supply clean power for nearly 4 million UK homes. The transaction will result in a capital gain for the Swedish company, with the purchase price equal to the enterprise value of $1.21 billion. The next interim report from the corporation will reveal the precise amount of the gain.
REGlobal’s Views: Vattenfall’s recent exit from a major offshore wind project comes at a time when there have been various similar announcements from different offshore projects around the world. Recent supply chain issues, increase in capital costs of projects and shortage of logistics vessels are being cited as some of the drivers for these offshore wind project sales. Meanwhile, Vattenfall’s sale will help the company to raise funds for other development activities.
