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Deepwater Wind to be purchased by Danish energy giant Orsted

The Rhode Island-based company that is building a 90-megawatt wind farm to supply Long Island's South Fork with power said it is still committed to the project.

Deepwater Wind, which has built turbines off the

Deepwater Wind, which has built turbines off the coast of Block Island, Rhode Island, above, has agreed to be purchased by Danish energy giant Orsted for $510 million. Photo Credit: AP / Michael Dwyer

Deepwater Wind, the Rhode Island-based company that is building a 90-megawatt wind farm to supply Long Island's South Fork with power, has agreed to be purchased by Danish energy giant Orsted for $510 million. 

The agreement, announced by both companies Monday morning, would create a combined company with offshore wind leases and projects across the Eastern United States. Orsted, formerly known as DONG Energy (Danish Oil and Natural Gas), has offshore wind lease rights off the coasts of Massachusetts, Virginia and New Jersey. 

Deepwater Wind, which built the first U.S. offshore wind farm off Block Island, has proposed projects throughout the Northeast and is, like Orsted, among the bidders for some 800 megawatts of offshore wind energy contracts under a pending state bidding request. 

Jeff Grybowski, chief executive of Deepwater, said the company will continue to move forward with the proposed South Shore wind farm, which includes turbines to be erected in ocean waters off Rhode Island about 30 miles from Montauk Point. The project, which is opposed by Long Island commercial fishing groups, is set to be in operation by late 2022. 

Grybowski said the acquisition by Orsted was a “pretty typical step for a company like ours,” in a U.S. wind-energy market that is accelerating and has “become a real focal point of the [world] offshore wind market.” Grybowski will take the role of co-chief executive officer of the newly combined U.S. Orsted wind company, along with Thomas Brostrom, the current CEO of Orsted U.S. offshore wind. 

Brostrom noted Orsted's experience globally, with 25 projects to date, but “none in the U.S.” Deepwater, he said, "has the savvy and skilled permitting and development teams” in the United States to help with future projects. Deepwater in May won a bid by Rhode Island to build a 400-megawatt offshore wind farm in the Massachusetts-Rhode Island lease area, a bid that Orsted has also sought.

Orsted, a majority Danish-state-owned entity with outside investors that include an investment group tied to Goldman Sachs, is the world’s largest wind-energy developer, with a 25 percent to 30 percent market share.

“We would like to maintain a good position not only globally but also in the U.S. market,” he said.

But at least one group saw cause for concern.

“These are foreign oil and gas companies that are coming to the U.S. and taking our fisheries away from us without any mitigation or negotiations,” said Bonnie Brady, executive director of the Long Island Commercial Fishing Association, an industry group. “It’s ridiculous. You want to talk about a job killer. This is the biggest threat to the U.S. commercial fishing on the Eastern Seaboard.”

Richard Kauffman, chairman of energy and finance for the state, was reported by Newsday in 2016 to have a stake in a Goldman Sachs subsidiary that held a 14 percent stake in Orsted predecessor DONG Energy. Kauffman in 2016 said he’d recuse himself from dealings with DONG.

In 2017, Kauffman said he'd divested nearly all his energy-related stocks except for his Orsted holdings but said he'd continue to recuse himself on matters related to the company. A spokeswoman for Kauffman on Wednesday said the Goldman subsidiary has since sold off its Orsted holdings.

Deepwater's purchase by Orsted awaits federal regulatory approvals and is expected to be completed before year’s end.

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