Orsted buys Rhode Island offshore wind business for $510 million

• Rhode Island-based Deepwater Wind is responsible for the only operational offshore wind farm in the U.S.
• Orsted says that Deepwater Wind's portfolio has a total potential capacity of 3.3 gigawatts.

The Block Island Wind Farm, located off the coast of Block Island, RI, is pictured on Jun. 13, 2017.

David L. Ryan | Boston Globe | Getty Images

Danish energy business Orsted has entered into an agreement with the U.S.-based D.E. Shaw Group to buy a 100 percent equity interest in its offshore wind developer Deepwater Wind.

In a statement Monday, Orsted said that the purchase price for the deal was $510 million. Rhode Island-based Deepwater Wind is responsible for the only operational offshore wind farm in the U.S., the 30 megawatt (MW) Block Island facility.

Orsted said that Deepwater Wind's portfolio had a total potential capacity of approximately 3.3 gigawatts (GW), including offshore wind development projects in Rhode Island, Connecticut, Maryland and New York. Orsted's offshore wind portfolio in the U.S. amounts to around 5.5 GW.

Martin Neubert, Orsted's CEO of offshore wind, welcomed the deal, stating that it would create the "number one offshore wind platform in North America."

The transaction, Neubert added, would merge "Deepwater Wind's longstanding expertise in originating, developing and permitting offshore wind projects in the U.S., and Orsted's unparalleled track-record in engineering, constructing, and operating large-scale offshore wind farms."

While offshore wind is still relatively new to the U.S., it is well established in other parts of the world. Europe is home to several huge offshore wind projects, including the Walney Extension Offshore Wind Farm. Situated in the Irish Sea, that facility has a total capacity of 659 MW and is capable of powering nearly 600,000 homes in the U.K.

Once the Deepwater Wind transaction – which is subject to clearance by U.S. competition authorities – is closed, the new organization will be called Orsted U.S. Offshore Wind. The deal is expected to close by the end of 2018, Orsted said.