Northland Power, the Canadian renewables operator, announced the acquisition of the long-gestating but still early-stage NaiKun offshore wind project off the west coast of Canada — giving a dash of vitality to the otherwise somnolent Canadian offshore wind market.
Northland owns a range of generating assets across Canada but has made its biggest mark in recent years by investing in offshore wind projects in Europe and East Asia. On Monday, as part of a COVID-19-related update to investors, the company announced plans to acquire the NaiKun offshore wind project from its small but publicly listed developer, the NaiKun Wind Energy Group.
Northland, which owns majority stakes in the operating Nordsee One and Gemini offshore wind projects in Northern Europe, will “apply both its global offshore wind experience and long track record of developing Canadian power projects to this project,” CEO Mike Crawley said in a statement.
“Before anything else happens, we will be reaching out to the Haida Nation to discuss the project and how it could potentially move forward,” Crawley added, referring to the indigenous people of the Haida Gwaii archipelago.
Through a spokesperson, the company declined to give additional detail about its plans for the project.
Northland’s involvement opens a new chapter for a project that has faced various setbacks in more than a decade of development.
The project, provisionally sized at 400 megawatts and located in the Hecate Strait off the coast of mainland British Columbia, drew the attention in 2017 of Ørsted, the world’s leading offshore wind developer. Ørsted signed a letter of intent that gave it the exclusive right to negotiate a joint development deal with NaiKun, only to pull away the following year to focus its efforts on the more advanced U.S. market.
At the time of its involvement, Ørsted claimed the 550-square-kilometer site off British Columbia had some of the “strongest, most consistent winds in the world.”
While financial details of Northland’s acquisition were not revealed, the NaiKun Wind Energy Group said in its own statement that it would receive a fixed payment upon a future financial close at the project, in addition to annual cash distributions if a wind farm enters operation. NaiKun will also have the option of buying back a 10 percent stake.
Several offshore wind projects have made headlines in Canada over the years only to flame out — including the Trillium project in Lake Ontario, which once was slated to be the first offshore wind farm built in the Great Lakes region, and the Beothuk project in Atlantic Canada.
But the cost equation for offshore wind has changed rapidly over the past several years, as demonstrated by progress in the U.S. market. East Coast states are now targeting nearly 30 gigawatts of future capacity and have drawn a long list of major global energy developers, including Shell, Equinor, EDF and Ørsted.