Northland Power Inc.
Northland Power Announces Acquisition of a 49% Interest in Baltic Power Offshore Wind Project in Poland With Potential Capacity of Up to 1200 MW
Northland continues to expand its European offshore wind footprint with a strategic partnership in Poland
- Continuation of Northland’s strategy of leveraging its top ten offshore wind sector position globally to expand its offshore wind portfolio
- Partnership delivers scale and opportunity to enter growing offshore wind market in Central Europe
- Poland provides an attractive investment destination, with clear roadmap for offshore wind and other renewable technologies such as onshore wind and solar
- Project expected to benefit from long-term, 25-year revenue contract
- Strategic partner PKN ORLEN, Poland’s largest company provides significant local presence
TORONTO, Jan. 29, 2021 (GLOBE NEWSWIRE) -- Northland Power Inc. ("Northland") (TSX: NPI) announced today that it has entered into an agreement with PKN ORLEN S.A. ("PKN ORLEN") (WSE: PKN) to acquire a 49% interest (subject to regulatory approvals) in the Baltic Power offshore wind project in the Baltic Sea ("Baltic Power") with a total capacity of up to 1,200 megawatts (MW) of offshore wind generation. Baltic Power is a mid-development stage project located approximately 23 kilometers offshore from Poland’s coast in the Baltic Sea. The project, which secured its location permit, signed its grid connection agreement as well as filed its environmental permit in 2020, allows Northland to capitalize on the growth in renewable energy demand in a growing Central European market. Inclusive of the purchase price, Northland expects to invest approximately PLN 290 million (CAD $100 million) towards the Baltic Power development in 2021, of which, some of this amount represents development expenditures that will be spent throughout 2021.
"Today's announcement reflects Northland's continued growth and leadership in renewable energy and strengthens our position as a global leader in offshore wind development," said Mike Crawley, Northland’s President and Chief Executive Officer. "We are excited to partner with PKN ORLEN to expand our presence in Europe through the development of the Baltic Power offshore wind project, but more importantly, further contribute to the global decarbonization transition by helping Poland fulfill its renewable energy ambitions."
PKN ORLEN is the largest company in Central and Eastern Europe and is publicly listed on the Warsaw Stock Exchange (WSE: PKN). The Company is part of the ORLEN Group, which has operations in six markets: Poland, the Czech Republic, Germany, Lithuania, Slovakia, and Canada. PKN ORLEN is a major player on the Polish energy market, with generation capacity of 3.2 GWe.
The Northland and PKN ORLEN partnership (collectively, the "Partnership") will co-develop the Baltic Power opportunity that is expected to secure a 25-year Contract for Difference (CfD) offtake agreement, providing Northland an investment consistent with the company’s objectives of creating high-quality projects underpinned by revenue contracts that deliver predictable cash flows. Construction activities are scheduled to start in 2023 with commercial operations expected in 2026.
Baltic Power is a natural addition to Northland’s extensive offshore wind portfolio and provides the company with a new market to further enhance the geographic and regulatory diversity in its portfolio and cashflows. Currently, Northland has controlling interests in three operational offshore wind facilities in the North Sea, Gemini, Nordsee One and Deutsche Bucht farms with a total combined gross capacity of approximately 1,200 MW (890 MW net to Northland). Once complete, Baltic Power will substantially increase Northland’s total gross offshore wind capacity in Europe up to approximately 2,400 MW (1,500 MW net).
Poland, a member state of the European Union, is the fifth largest country in European Union and the biggest market in Central and Eastern Europe with a population of approximately 40 million people. The country has an S&P investment grade rating of A-, with strong economic growth forecasts and a growing middle class. Energy demand in Poland is expected to rise over the coming decades as the country continues its economic growth. Poland’s draft energy policy foresees the need to add 10 to 12 GW of offshore wind capacity and an additional 15 GW of solar capacity by 2040 and the country’s recent passing of its Offshore Wind Act paves the way for Poland to develop offshore wind. This will result in a significant amount of investment into renewable energy generation. Once complete, Baltic Power will make a significant contribution to the future of clean and green energy production in Poland.
Northland’s business strategy is centered on establishing a significant global presence in target markets by leveraging its expertise, early mover advantage and forming strategic local partnerships to enter new markets. Northland’s offshore wind portfolio includes operating and development projects in Europe as well as a significant development portfolio in Asia encompassing the 1,044 MW Hai Long, 1,000 MW Dado Ocean and 600 MW Chiba projects in Taiwan, South Korea and Japan respectively.
Please note: All amounts expressed herein converted into Canadian Dollars at an exchange rate of PLN/Cad of 0.34.
ABOUT NORTHLAND POWER
Northland Power is a global power producer dedicated to helping the clean energy transition by producing electricity from clean renewable resources. Founded in 1987, Northland has a long history of developing, building, owning and operating clean and green power infrastructure assets and is a global leader in offshore wind. In addition, Northland owns and manages a diversified generation mix including onshore renewables, solar and efficient natural gas energy, as well as supplying energy through a regulated utility.
Headquartered in Toronto, Canada, with global offices in eight countries, Northland owns or has an economic interest in 2.7 GW (net 2.3 GW) of operating generating capacity and a significant inventory of early stage development opportunities encompassing nearly 4.0 GW of potential capacity.
Publicly traded since 1997, Northland's common shares, Series 1, Series 2 and Series 3 preferred shares trade on the Toronto Stock Exchange under the symbols NPI, NPI.PR.A, NPI.PR.B and NPI.PR.C, respectively.
ABOUT PKN ORLEN
PKN ORLEN is the largest company in Central and Eastern Europe, listed in prestigious global rankings such as Fortune Global 500 and Platts TOP250. The ORLEN Group has operations in six home markets: Poland, the Czech Republic, Germany, Lithuania, Slovakia, and Canada. The Group owns state-of-the-art integrated assets with an annual processing capacity of over 35 million tonnes of various types of crude oil, and markets its products through the region’s largest network of over 2,800 modern service stations. The ORLEN Group’s offering encompasses over 50 top-quality petrochemical and refinery products, which are sold in more than 110 countries across 6 continents. PKN ORLEN is a major player on the Polish energy market, with a generation capacity of 3.2 GWe. The Group’s upstream assets include 2P oil and gas reserves estimated at 197.3 mboe at the end of 2019. PKN ORLEN is a leader set to accomplish the process of creating a single company with a diversified revenue stream and a strong position in the European market. In April 2020 the Group took over the Energa Group, in July 2020 it received conditional clearance from the European Commission to acquire Grupa LOTOS, and it has initiated the process to acquire PGNiG. Full asset integration will be an important step towards building a strong multi-utility group with global potential. For several consecutive years, ORLEN has been recognized as the most valuable Polish brand, worth PLN 4.7bn. PKN ORLEN is also the region’s only company to receive the coveted title of The Most Ethical Company from the US-based Ethisphere Institute for the seventh time running.
This release contains certain forward-looking statements. Readers are cautioned that such statements may not be appropriate for other purposes. Forward-looking statements include statements that are predictive in nature, depend upon or refer to future events or conditions, or include words such as "expects," "anticipates," "plans," "believes," "estimates," "intends," "targets," "projects," "forecasts" or negative versions thereof and other similar expressions, or future or conditional verbs such as "may," "will," "should," "would" and "could." These statements may include, without limitation, statements regarding Northland’s expectations or ability to complete any future offerings of securities. These statements are based upon certain material factors or assumptions that were applied in developing the forward-looking statements. Although these forward-looking statements are based upon management’s current reasonable expectations and assumptions, they are subject to numerous risks and uncertainties. Some of the factors that could cause results or events to differ from current expectations include, but are not limited to, construction risks, counterparty risks, operational risks, foreign exchange rates, regulatory risks, maritime risks for construction and operation, and the variability of revenues from generating facilities powered by intermittent renewable resources and the other factors described in the "Risks and Uncertainties" section of Northland’s 2019 Annual Report and Annual Information Form, both of which can be found at www.sedar.com under Northland's profile and on Northland’s website northlandpower.com. Northland’s actual results could differ materially from those expressed in, or implied by, these forward-looking statements and, accordingly, no assurances can be given that any of the events anticipated by the forward-looking statements will transpire or occur.
The forward-looking statements contained in this release are based on assumptions that were considered reasonable on date of release. Other than as specifically required by law, Northland undertakes no obligation to update any forward-looking statements to reflect events or circumstances after such date or to reflect the occurrence of unanticipated events, whether as a result of new information, future events or results, or otherwise.
For further information, please contact:
Wassem Khalil, Senior Director, Investor Relations & Strategy
+1 (647) 288-1019
For media inquiries, please contact
Susan Sperling, Director of Communications
+1 (647) 288-1105
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