bp and Energie Baden-Wuerttemberg AG (EnBW) of Germany have together been selected as the bidder for two major leases in the UK Offshore Wind Round 4.
This marks bp’s entry to the UK’s offshore wind power sector, currently the largest in the world, and is further progress towards bp rapidly building a world-class wind energy business.
The leases, both located in the Irish Sea, offer a combined potential generating capacity of three gigawatts (GW), the maximum award possible under the rules of the round, and a 60-year lease life. Once operational, this generating capacity would be sufficient to power more than 3.4 million UK households with clean electricity.
bp and EnBW intend to form a 50-50 joint venture to jointly develop and operate the leases. The joint venture expects to make four annual payments of £231million on each lease before projects reach final investment decision. Projects are expected to be operational in seven years.
The two leases are highly advantaged, with strong wind resources and proximity to shore that make them attractive investment opportunities. Their near-shore location, around 30 kilometres off the coast of North West England and North Wales, will allow for lower cost, more reliable transmission infrastructure. Their shallow water depths of 35-40 metres are also expected to support efficient and cost-effective development.
Bernard Looney, group chief executive said “offshore wind is integral to delivering the UK’s green industrial revolution. Building on the UK’s strengths, the government’s 10-point plan aims to produce enough offshore wind to power every UK home, quadrupling output to 40GW by 2030 – and bp is delighted to play a part in this.”
Frank Mastiaux, chief executive of EnBW, added “We are delighted with this auction win in a tough international bidder field. The award confirms that bp and EnBW are the right partners with the right strategy and the right capabilities. EnBW is among today’s leaders in advanced offshore wind technology. In partnership with bp, a major player with international experience in the offshore business, we will once again contribute significantly to a climate-friendly energy future in the UK, which is currently the world’s largest market for offshore wind power.”
In 2020 bp announced its net zero ambition – to become a net zero company by 2050 or sooner, and help the world get to net zero – and set out its new strategy to deliver this. Rapidly growing its renewables business is core to this strategy – by 2030 bp aims to have developed around 50GW of net renewable generating capacity, up from 3.3GW in 2020. The strategy also includes increasing bp’s annual low carbon investment ten-fold, to around $5 billion a year.