Ørsted Buys PSEG Stake in Offshore Wind Project, Announces Major Texas Solar Farm

Danish energy developer Ørsted continues to expand its presence in the U.S. market, with the company on Jan. 18 announcing it has signed a deal to acquire Public Service Enterprise Group’s (PSEG’s) 25% stake in the 1.1-GW Ocean Wind 1 project about 15 miles off the coast of New Jersey. The move will give Ørsted full ownership of the project once the transaction closes, expected within the next couple of months.

Wednesday’s news comes just days after the Copenhagen-headquartered group said it would build the 471-MW Mockingbird Solar Center in Texas. That project, which will span about 4,900 acres, is the largest solar project to date in Ørsted’s portfolio.

Ørsted officials said PSEG will continue to be part of the onshore infrastructure construction for Ocean Wind 1.

“PSEG has been a valuable partner as we’ve advanced Ocean Wind 1 to this point, and as we’ve successfully advanced our offshore wind vision in the U.S.,” said David Hardy, Ørsted Americas’ region chief executive. “With a well-established presence in the U.S., we’re confident in our ability to drive the project forward with commercial operations beginning as planned.”

Commercial Operation in 2025

Ocean Wind 1 is expected to begin sending electricity to the power grid by the end of next year, with full commercial operation expected in 2025. Ørsted’s first foray into U.S. offshore wind came with the 30-MW Block Island pilot project off the coast of Rhode Island, which was the first U.S. offshore wind project. Ørsted now has about 5 GW of U.S. offshore wind projects in development, in addition to about 5.5 GW of U.S. onshore wind, solar, energy storage, and e-fuel capacity.

The Ocean Wind 1 project is located about 15 miles off the coast of New Jersey. Source: Ocean Wind 1

Lathrop Craig, senior vice president and chief commercial officer for PSEG, in a statement said, ““As Ocean Wind 1 has evaluated the optimal way to move forward, it’s become clear that it’s best for the project for PSEG to step aside and allow for a better-positioned investor to join the project, so that it can proceed with an optimized tax structure. While this was a difficult decision, it was driven by the best interests of the project and New Jersey’s offshore wind goals. PSEG will continue to actively support offshore wind in New Jersey and the region.”

Land Conservation

The Texas solar project includes a promise from Ørsted to donate about 1,000 acres of tall grass prairie to The Nature Conservancy, a nonprofit global environmental group. The final investment decision for the Mockingbird project, announced Jan. 13, comes after Ørsted and Royal DSM—a global health and nutrition company—signed a 10-year power purchase agreement for the project in 2021.

“The decision to build Mockingbird represents an important milestone for our onshore business and for our expansion in solar PV,” said Hardy. “We look forward to building Mockingbird and for this project to start producing clean energy at a large scale. Mockingbird will achieve this while doing so in a way that prioritizes conservation and our deep commitment to the communities we serve.”

“We need to deliver green energy for this generation while protecting natural habitats for the next. That’s why we’ve prioritized the Smiley-Woodfin Prairie in Texas as our first biodiversity initiative in the United States,” said Daniel Willard, Biodiversity Specialist at Ørsted. “We want to thank The Nature Conservancy for working with us on this conservation effort. Drawing on both internal expertise and outside guidance, we’ll continue to look for opportunities to protect the prairie and ensure that native plants and pollinators thrive.”

Ørsted officials said the solar farm is expected to generate $215 million and add 200 jobs to the regional economy. The company has a goal to install at least 50 GW of renewable energy generation capacity by the end of 2030, including 30 GW of offshore wind. The company this week also filed an application to build 15 GW of new offshore wind capacity around the southern tip of Sweden and the Gulf of Bothnia, between Sweden and Finland.

Ørsted last week received approval from UK regulators to add energy storage to the company’s 2.4-GW Hornsea 3 offshore wind project in the North Sea.

Darrell Proctor is a senior associate editor for POWER (@POWERmagazine).

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