Canadian power producer Northland Power has signed an agreement with Highland Group to acquire the 252MW Deutsche Bucht offshore wind farm in the German North Sea.

Deutsche Bucht, which is Northland's third offshore wind project, is expected to cost  €1.2bn.  The wind farm is located 95km northwest of the island of Borkum in the German Exclusive Economic Zone.

Once operational, the wind farm is expected to generate more than 1,000GWh of electricity per year.

Northland intends to invest about C$400m ($298m) of corporate funds in the project, while the balance of the project cost will be covered through project financing and pre-completion revenues. The financial closing for the project is expected to take place during mid-2017.

Under the German Renewable Energy Act (EEG), the wind farm is entitled to get a fixed feed-in tariff subsidy for about 13 years.

While a significant part of the project returns are expected to be earned during the 13 year feed-in-tariff period, the remainder of the expected returns the later years coming from the German wholesale electricity market.

Deutsche Bucht offshore wind farm is presently under advanced stages of development and the construction work is expected to begin shortly after the financial close and the project is expected to be completed by end of 2019.

For the wind farm, MHI Vestas Offshore Wind has been selected to supply and install the turbines with Van Oord supplying the turbine installation vessel.

The wind farm will be connected to the 800 MW BorWin Beta off-shore converter station which has already been constructed.

Northland Power CEO John Brace said: "We are pleased to add a third solid and robust offshore wind project to Northland's portfolio. Continued growth in the thriving offshore wind sector is an important component of Northland's strategic development approach.

“DeBu will support our commitment to deliver long term value to shareholders, while aiding the global transition to clean and green energy sources."

Image: Northland Power to acquire Deutsche Bucht offshore wind farm in Germany from Highland Group. Photo: Courtesy of xedos4/