bp advances offshore wind growth strategy
bp and Energie Baden-Wuerttemberg AG (EnBW) of Germany have together been selected as the preferred bidder for two major leases in the UK Offshore Wind Round 4, the first such UK leasing round since 2010. 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.
Lease one covers an area of c.300km2 and lease two c.500km2. 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 industry-leading 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.
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Press release by: bp