OIL and gas major bp and German energy company EnBW have been selected as the preferred bidder for two major leases in the UK Offshore Wind Round 4.
This marks bp’s entry into the UK’s offshore wind power sector, currently the largest in the world.
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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.
EnBW and bp 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.
Their potential combined 3GW projects compare to the 3.6GW Dogger Bank windfarm in the North Sea, the world’s largest, which is estimated to cost £6bn over three phases.
Bernard Looney, bp chief executive officer, said: “These projects – in which we are teaming up with an experienced partner EnBW – are absolutely in line with our determination to invest with discipline into only the very best opportunities. We are fully confident that these highly advantaged resources will deliver – at a minimum – the 8-10% returns we demand of our renewables investments.
“Additionally – 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.”
