Iberdrola and Orsted sell EU operations in streamlining moves

Danish developer Orsted and Spanish utility Iberdrola have both kicked off the week with divestment deals underlining both companies' determination to streamline their investment portfolios.

Orsted, the world's biggest offshore wind developer, revealed that it has decided to sell its French onshore wind and solar businesses to Paris-based energy giant Engie.

The sale of Ostwind France, as the assets are collectively known, is expected to close in the second quarter of 2024.

Ostwind France has been developing renewable projects for more than 20 years and currently has 54MW of capacity in operation plus 24MW of wind projects under construction.

The assets came to Orsted in 2022 following the Danish company's acquisition of Ostwind AG's assets in both France and Germany.

The backdrop to this divestment is the a strategic plan that Orsted announced in February. The plan was a response to a troubled year when was forced to drop two US offshore wind projects and — largely as a result of this — declare heavy impairments.

“As part of our updated business plan, we revised our build-out ambitions towards 2030 with an emphasis on where we believe we can realise the most value for Orsted. Building on this plan, we’ve decided to concentrate our efforts on the UK, Irish, German, and Spanish markets for onshore wind and solar, in Europe,” recalled Kieran White, head of Orsted’s onshore business in Europe.

With the divestment of Ostwind France, however, Orsted will have no remaining activities in France.

Orsted added , however, that the German arm of Ostwind will remain a focus of its European onshore wind and solar investments, stressing that this arm of its business has advanced a number of projects towards final investment decision and also continues to develop a pipeline of onshore wind and solar PV projects.

Iberdrola rotation

Spanish utility Iberdrola is moving along with its own plans to divest non-core assets, reaching an agreement with Premier Energy Group to sell its wind energy asset in Romania for €88m ($94.2m).

The sale of this business, known as Eolica Dobrogea One, means that Iberdrola will no longer have any assets in Romania, once regulatory approvals are obtained.

This divestment forms part of a strategic plan presented in March, under which Iberdrola set an asset rotation target of €12.2bn in the 2024-2026 period.

In recent months, Iberdrola has also unveiled several long-term alliances geared toward developing clean energy.

Most recently this included an investment alliance in Iberia with Norges Bank Investment Management, expanded earlier this month to 2.5GW.

A $15bn agreement with Masdar to co-invest €15bn in offshore wind and green hydrogen in Germany, the United Kingdom and the US was signed in December. This followed an earlier agreement, announced with Masdar in July, to co-invest in the Baltic Eagle offshore wind farm.