Investors

CIP buys company to bid on Massachusetts offshore wind

The Danish fund manager’s acquisition of Offshore MW will allow it to propose a project in a 160,000 acre area off the coast of Massachusetts.

-

Copenhagen Infrastructure Partners (CIP) has fully acquired a company with rights to bid on an offshore wind project in the waters off the coast of Massachusetts.

With the acquisition of Offshore MW, the Danish fund manager has positioned itself to participate in a tender auction planned for mid-2017 for a contract to build the state's first offshore wind project.

The move comes in the same month Massachusetts Governor Charlie Baker signed legislation requiring utilities to generate 1.6GW of electricity from offshore wind farms within a decade, and a couple weeks after construction finished on the US's first offshore wind project, the 30MW Block Island project near Rhode Island.

Christina Sorensen, a senior partner at CIP, told Infrastructure Investor it's “quite interesting” the US market seems to be warming up to offshore wind, a sector Europe has developed for years. The continent has around 11GW cumulative capacity, according to the European Wind Energy Association. However, regulatory and cost barriers have so far prevented large-scale development in the US.

Sorensen said CIP will likely bid to develop a project that generates 300MW to 500MW.

CIP purchased Offshore MW for an undisclosed amount through its €2 billion Copenhagen Infrastructure II fund. It also provided a €250 million loan last June through this fund to help construct the 204MW Veja Mate project off the coast of Germany. CIP invested in its only other offshore wind project, the 588MW Beatrice offshore wind farm off the coast of Scotland, through the Copenhagen Infrastructure II and I fund.

DONG Energy, a Danish energy developer, and Deepwater Wind, the Block Island project developer, also have companies qualified to bid for a project off the coast of Massachusetts.

Last week, the US Bureau of Ocean Energy Management (BOEM) issued a request for interest in a 68,000 acre lease area off the coast of California. One developer, Trident Winds, has already proposed a 765MW floating wind project in the area. If no other developer expresses interest, BOEM can issue a lease without holding an auction.