PE-led farm-ins for European offshore wind assets surge by 6X y-o-y to 21 GW in 2022

While the global wind sector has weathered challenging conditions in 2022 due to supply chain issues, rising interest rates, and volatile power prices, the offshore wind sector has continued its rise. Deal activity for offshore wind assets increased by 78% y/y in 2022, while the cumulative transaction value more than doubled to $8.7bn. Private equity (PE) firms and PE-backed companies have led this surge, announcing deals worth more than $8bn during the year. The Enerdatics research team has analyzed PE-backed acquisitions of offshore wind assets since 2017, and summarized its findings on the attached slide, the highlights of which are:

– ~50% of the farm-ins are for under-development projects, primarily due to the lower development uncertainties associated with projects that have been reasonably de-risked by the developer

– The remaining acquisitions are for under construction and operational assets backed by stable, long-term regulated revenue mechanisms such as CfDs and FiTs; corporate PPAs are becoming an increasingly attractive power sale arrangement

– Activity is led by the UK and Germany, with a sharp uptick in investor interest in Sweden, Denmark, and the Netherlands. Supportive government policies in these countries, such as Germany's Easter Package, as well as upgraded national offshore wind targets are driving deal activity in the continent

– Greencoat Capital, The Renewables Infrastructure Group (TRIG), Global Infrastructure Partners (GIP), Copenhagen Infrastructure Partners (CIP), Ingka Investments, and Energy Infrastructure Partners (EIP) leading PE farm-in activity in offshore wind assets

– Going forward, Enerdatics expects farm-ins to continue being PE firms’ preferred mode of entry in capital-intensive energy infrastructure projects with long lead times. As the economic headwinds impacting the North American wind sector intensify, Europe will witness consistent y-o-y surges in deal value and volume for offshore wind projects, led by global asset managers

The above analysis is proprietary to Enerdatics’ energy analytics team, based on the current understanding of the available data. The information is subject to change and should not be taken to constitute professional advice or a recommendation.