bp and EnBW to form offshore wind joint venture

This marks bp’s entry into the UK’s offshore wind power sector 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 3 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 £231 million 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 km 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 m are also expected to support efficient and cost-effective development.

Lease one covers an area of circa 300 km² and lease two circa 500 km². As they are adjacent, projects are expected to benefit from significant synergies in procurement, development and operational costs. Additional value is also expected to be generated through integration with bp’s trading organisation to take power to market, as well as the provision of power for bp’s fast-growing electric vehicle charging network in the UK and other opportunities.

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 50 GW of net renewable generating capacity, up from 3.3 GW in 2020. The strategy also includes increasing bp’s annual low carbon investment ten-fold, to around $5 billion a year.

bp and EnBW have already started some pre-work activities, including collection of vital environmental data through bird surveys – an integral part of biodiversity requirements – and have applied for grid connection.

bp already has a significant onshore wind business in the US with a gross generating capacity of 1.7 GW, operating nine wind assets across the country. Since setting its new strategy last August 2020, bp has already formed a partnership with Equinor to develop offshore wind projects in the US, including the Empire Wind and Beacon Wind projects off the East Coast that have a planned potential 4.4 GW generating capacity. To date, these projects have been selected by New York to supply 3.3 GW of power to the State, underpinning the commercial attractiveness of the investments.

EnBW is a major German energy company, with more than 10 years of experience in designing, constructing and operating wind assets. EnBW plans for installed renewable energy capacity to account for 50% of its generating portfolio by the end of 2025. It aims to reach climate neutrality by 2035. EnBW currently has onshore wind assets in Germany, France and Sweden and operates four offshore wind assets in the German Baltic Sea and North Sea.

The Crown Estate will undertake a Plan-Level Habitats Regulations Assessment (HRA) of the Round 4 leasing plan, and subject to the outcome of the HRA, agreements for leases are expected by Spring 2022.

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