Private equity firm Blackstone (NYSE: BX) announced it has closed a EUR 1.2 billion transaction for "Meerwind," the largest German offshore wind farm to date.
The 288 megawatt (MW) wind farm will be situated approximately 23 km off the German island of Helgoland in the North Sea. It will consist of 80 Siemens turbines rated at 3.6MW each.
When it’s completed in 2013, Meerwind will supply electricity to about 400,000 households, while eliminating a million tons of carbon emissions each year.
This huge financial transaction demonstrates that privately financed projects of this scale are possible and that private capital can play a critical role in accelerating a shift from legacy fossil fuels to renewable energy.
Still, the financing would not have been possible without the German government’s favorable regulatory framework for offshore wind, says Blackstone.
Germany’s long-term, fixed feed-in tariff and a requirement that local grid operators must construct and pay for the interconnection of the wind park to the onshore grid (20%+ of total project costs) are innovative ways in which the government provides incentivize for private investment.
Meerwind is the first project to close under Germany’s revised feed-in tariff laws. The renewed incentives are designed to help replace the roughly 25,000 megawatts (MW) of energy Germany will need to retire its entire fleet of nuclear plants by 2022.
Estimates suggest more than 2,000 wind jobs will be created in various German locations to manufacture the 100,000 tons of equipment needed for the wind farm. Following construction, Meerwind will employ 80 people to operate and maintain the wind farm.
Blackstone’s Next Project
Concurrent with the Meerwind financial closing, Blackstone announced it acquired a permit to build another large offshore wind farm, Nördlicher Grund.
The 64-turbine wind farm with an estimated construction cost of EUR 1.3 billion will be situated approximately 100 km off the German coast in the North Sea. Construction is expected to commence in 2013, with completion in 2016.
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