Octopus Energy has launched a new fund to invest $3.5bn (£3bn) in offshore wind by the end of the decade, welcome news for the industry as it continues to battle a string of setbacks relating to regulation, costs and supply chain issues.

The Octopus Energy Offshore Wind fund will be managed by the company’s generation arm in partnership with Japanese energy major Tokyo Gas, which owns almost 10% of Octopus and has so far invested $220m (Y32.67bn) into the new scheme. Octopus will raise the rest of the $3.5bn target total from outside investors.

Zoisa North-Bond, CEO of Octopus Energy Generation, said that offshore wind holds “massive” potential. “This latest partnership further deepens Octopus Energy’s relationship with Tokyo Gas and we look forward to welcoming on board more investors so together we can tap into this huge offshore wind opportunity worldwide.”

Focus for allocation of the funding will fall on projects based in Europe in a bid to reduce fossil fuel reliance and boost domestic energy security, Octopus said in a press statement. The fund will invest in development, construction and operational-stage offshore wind farms and will consider both traditional offshore wind projects and floating offshore wind.

The fund is part of Octopus’ plans, announced in July this year, to catalyse $19bn worth of investment in the offshore wind industry by 2030.

Tokyo Gas bought a 9.7% stake in Octopus Energy for $200m in December 2020 as part of deal that also involved launching Octopus in Japan.

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By GlobalData

Kentaro Kimoto, vice-president of Tokyo Gas, said: “Tokyo Gas has set a target to acquire and trade 6GW of renewable power sources by 2030. To accomplish this goal, we have [looked at] offshore wind projects, and will accelerate developments of offshore wind, including floating offshore wind.”

The global offshore wind industry has been struggling in recent years as prices continue to soar, making construction and operational costs unviable. Problems with equipment reliability, supply chain issues and public opposition in some parts of the world to coastal wind developments have also hindered the industry’s expansion.