Repsol enters U.S. onshore wind market with $768 mln ConnectGen buy - Reuters
Repsol enters U.S. onshore wind market with $768 mln ConnectGen buy | Reuters
Repsol enters U.S. onshore wind market with $768 mln ConnectGen buy
The logo of Spanish energy group Repsol is seen at a gas station in Arinaga, in the island of Gran Canaria, Spain, October 26, 2022. REUTERS/Borja Suarez Acquire Licensing Rights
MADRID, Sept 7 (Reuters) - Repsol (REP.MC) said it had entered the U.S. onshore wind market by buying renewable energy developer ConnectGen for $768 million, expanding its presence in a country the Spanish energy firm sees as a key market.
The acquisition of ConnectGen from Quantum Capital is part of the Spanish company's pivot from oil and gas to renewables, with a special focus on the United States.
The move "accelerates our commitment to renewable generation in one of the markets with the greatest potential for future growth," Repsol Chief Executive Josu Jon Imaz said in a statement on Thursday.
Repsol's purchase comes a day after it agreed to sell its oil and gas assets in Canada to Peyto (PEY.TO) for $468 million.
ConnectGen's 20 GW in planned onshore wind, solar and energy storage projects will help Repsol achieve its goal of reaching 20 GW of installed renewables capacity by the end of the decade.
It currently has around 2 GW of renewables in operations and another 3 GW under construction.
This is Repsol's latest deal in recent years aimed at boosting its renewables business. The company bought renewable energy firm Asterion Energies and took a 40% stake in U.S. renewables developer Hecate Energy.
The deal is expected to close by the end of the year.
Reporting by Pietro Lombardi; Editing by Inti Landauro and Alexander Smith
Our Standards: The Thomson Reuters Trust Principles.
Related Knowledge Center: Offshore wind energy
Over the next decade, U.S. offshore wind power is expected to grow from a single 30-megawatt wind farm off Rhode Island to more than 2,000 MW of capacity along the Atlantic Seaboard. There are contracts for wind power off the coasts of Massachusetts, Connecticut, New York, Maryland, New Jersey, Rhode Island, and Virginia.
The National Renewable Energy Laboratory has estimated the United States has over 4,000 gigawatts (GW) of offshore wind potential, enough to power the country four times over.
The growth in part being spurred by state solicitations, including in New York, where then-Gov. Andrew Cuomo (D) set a commitment of 9,000 MW of offshore wind by 2035, and in Connecticut, where in June 2021, Gov. Ned Lamont (D) signed legislation authorizing the construction of 2,000 MW of offshore wind by 2030.
The offshore development is also being driven by an investment tax credit set to end in December 2019 and is equal to 12 percent of expenditures. U.S. Sens. Susan Collins (R-Maine) and Tom Carper (D-Del.) have introduced a bill to extend the tax credit for up to eight years.
The Interior Department has held eight competitive lease sales that resulted in 15 offshore wind leases over 1.7 million acres that has the potential for 21 GW of capacity. In February 2022, the Bureau of Ocean Energy Management completed a bidding process that realized $4.37 billion for 488,000 acres across six lease areas in federal waters off New York and New Jersey.
Projects have also been proposed off the Southeast coast, off California and Hawaii, and for the Great Lakes.