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February 9, 2021updated 23 Dec 2021 6:01am

UK Offshore Wind Round 4 auction sees wins for Total, RWE, BP, EnBW

Oil giants BP and Total have secured leases in the UK Offshore Wind Round 4 auction, along with RWE and Germany’s Energie Baden-Wuerttemberg (EnBW).

By Umesh Ellichipuram

Oil giants BP and Total have secured leases in the UK Offshore Wind Round 4 auction, along with RWE and Germany’s Energie Baden-Wuerttemberg (EnBW).

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Wind Power Market seeing increased risk and disruption

The wind power market has grown at a CAGR of 14% between 2010 and 2021 to reach 830 GW by end of 2021. This has largely been possible due to favourable government policies that have provided incentives to the sector. This has led to an increase in the share of wind in the capacity mix, going from a miniscule 4% in 2010 to 10% in 2021. This is further set to rise to 15% by 2030. However, the recent commodity price increase has hit the sector hard, increasing risks for wind turbine manufacturers and project developers, and the Russia-Ukraine crisis has caused further price increase and supply chain disruption. In light of this, GlobalData has identified which countries are expected to add the majority of wind power capacity out to 2030. Get ahead and download this whitepaper for more details on the current state of the Wind Power Market.
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Off the coast of East Anglia, Total won leases which it will operate with Macquarie’s Green Investment Groups, as part of a joint venture. The area has an estimated 1.5GW generation capacity.

Total renewables senior vice president Julien Pouget said: “This success builds on our historical expertise in the UK offshore and is paving the way to expansion of our renewable energy offering in the country in line with our strategy of becoming a broad-energy company”. These leases will be finalised in 2022.

RWE won two leases in the Irish Sea with a generation capacity of 3GW. Adjacent to this, BP won leases off the north coast of Wales and north-west coast of England.

This auction marks BP’s first offshore wind leases in the UK, which currently has the most offshore generation in the world. The company will create a 50/50 joint venture with EnBW to develop and operate the leases together.

The joint venture expects to make four annual payments of £231m on each lease before the projects reach final investment decision.

The leases together have a generation capacity of 3GW that would power more than 3.4 million homes in the UK.

Lease one covers an area of approximately 300km2 and lease two about 500km2. The projects will begin operations in seven years.

BP chief executive Bernard Looney said: “Success in this round marks BP’s entry into one of the world’s best offshore wind markets. This is both important progress towards BP’s transformation into an integrated energy company as well as a significant next step in our long history in the UK.

“We are fully confident that these highly advantaged resources will deliver – at a minimum – the 8-10% returns we demand of our renewable’s investments.

A Plan-Level Habitats Regulations Assessment of the Round 4 leasing plan will be carried out by the Crown Estate. Based on the outcome, agreements for leases are expected by next year.

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Free Report
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Wind Power Market seeing increased risk and disruption

The wind power market has grown at a CAGR of 14% between 2010 and 2021 to reach 830 GW by end of 2021. This has largely been possible due to favourable government policies that have provided incentives to the sector. This has led to an increase in the share of wind in the capacity mix, going from a miniscule 4% in 2010 to 10% in 2021. This is further set to rise to 15% by 2030. However, the recent commodity price increase has hit the sector hard, increasing risks for wind turbine manufacturers and project developers, and the Russia-Ukraine crisis has caused further price increase and supply chain disruption. In light of this, GlobalData has identified which countries are expected to add the majority of wind power capacity out to 2030. Get ahead and download this whitepaper for more details on the current state of the Wind Power Market.
by GlobalData
Enter your details here to receive your free Report.

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