Canadian investment firm Brookfield has bought one of the UK’s largest renewable developers. This is a major boost to the onshore wind sector in the UK after recent setbacks.
People with knowledge of the deal say that Brookfield is set to acquire Durham’s Banks Renewables for a price of almost $1bn.
Banks Renewables is part of the Banks Group and owns onshore wind farms that are operational in Northern England and Scotland. It also has an extensive portfolio of solar, battery and onshore wind assets under development.
Other developers have recently warned about the challenging environment for wind energy due to rising costs. Vattenfall, and Community Windpower both halted offshore and onshore projects respectively in the UK.
Sebastian Perl is the Brookfield vice president who led the transaction. He said that he believed there was a “generally very positive outlook” in the UK for renewables and that the cost pressures on onshore wind are short-term.
He said, “As a long term investor, we have a view on the long term.” “You will always face challenges in every market and business.” “It hasn’t altered our opinion of the UK market or investment climate.”
He said that he didn’t see Community Windpower’s windfall taxes on low-carbon generators as a “showstopper”.
The deal was done by Brookfield’s second Global Transition Fund. This fund began raising money in this year for investments that would help the transition away from fossil fuels.
The first Global Transition Fund, which was launched in 2013, raised $15bn. Its investments included the purchase of nuclear fuel and Westinghouse Westinghouse reactor developer and a partnership with Cameco.
Brookfield has already established itself in the UK onshore wind market. It holds some wind farms that are still in development, after having sold a few wind farms operating in 2021 to Danish firm Orsted.
It is currently building a 60MW Wind Farm in Scotland, and has agreed to sell the electricity to real estate developer Canary Wharf Group.
Banks Renewables has a portfolio of just over 4GW. This includes 300MW in operation, 300MW onshore, solar, and battery projects with planning permission and another 3.5GW that is still in the pipeline.
The majority of its onshore pipeline is located in Scotland. This reduces its exposure to restrictive planning rules in England. Last month, the UK government relaxed rules that effectively banned new onshore Wind Farms from England. However, industry experts warned that these changes may not be enough to encourage new developments.
Banks Group was founded in 1976 and has developed property in England, Scotland, and the North of England. It also mined coal from 1976 until 2020. Harry Banks, chairman and founder of Brookfield, said that the “greater resources’ would help to develop Brookfield’s renewables portfolio.
He added, “It’s good for Brookfield as they are buying a renewables company with a track record of success and the ability to move forward.” The deal should be finalized by the end November.