Wind Power

07 Oct 2023

Macquarie Weighs Sale of Stake in UK Offshore Wind Farm Race Bank, Sources Say

07 Oct 2023  by reuters   
Macquarie (MQG.AX) is considering selling its 25% stake in Race Bank, a 573 megawatt offshore wind farm located off Britain's Norfolk coast, according to two sources with knowledge of the matter.

The infrastructure group is working with advisors on the sale, which could value the wind farm at up to 3 billion pounds ($3.66 billion), one of the people said.

Race Bank started production in 2018 and provides enough power for the equivalent consumption of more than 510,000 homes, according to the website of Orsted (ORSTED.CO), another of the shareholders with a 50% stake.

Macquarie declined to comment.

Other shareholders of the wind farm are Sumitomo Corporation (8053.T) (12.5%) and Arjun Infrastructure Partners (12.5%).

The race to reduce reliance on fossil fuels has attracted investors to invest in offshore wind farms, which can produce more power than onshore installation.

But rising costs of materials, supply chain problems and design flaws are putting pressure on new projects.

Those already in operation are changing hands. Iberdrola sold last year a 49% stake in the Wikinger offshore wind farm and Equitix bought earlier this week a stake in Moray East, a 950 MW operational offshore wind farm in Scotland.

The UK government has a target of 50 GW of offshore wind to be installed by 2030, but its latest auction in September ended without bidders, with some arguing the price offered by the government did not reflect rising industry costs.

Several major developers have painted a gloomy picture of the industry as costs rise for new projects. Global leader Orsted said it might abandon U.S. projects, while Equinor, BP, Avangrid and Shell have cancelled or tried to renegotiate contracts for the first commercial-scale U.S. wind farms.

Globally, 8.8GW of new offshore wind was installed in 2023, the second biggest year ever and 380GW is projected to be installed by 2032, with almost half of that based in the APAC region - the new frontier for offshore wind, according to a report by the Global Wind Energy Council.

Macquarie is an active player in the offshore wind industry and holds investments in several projects in the UK and elsewhere.

Through its wind platform Corio Generation, it is developing the offshore wind farms West of Orkney (2GW) while Macquarie Asset Management is developing Outer Dowsing (1.5 GW), Rampion 2 (1.2 GW) and Five Estuaries (353 MW).

The Australian infrastructure investor said in April that it had agreed to sell stakes in eight other offshore wind farms around the UK to infrastructure investor Equitix.

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