Inspenet August 2, 2023.
In a strategic move marking its entry into the continental European offshore wind market, energy giant BP plc has emerged as the top winner in a recent auction for offshore wind sites in Germany. This development represents a major step in BP’s expansion into the renewable energy sector.
Collaboration for offshore wind energy projects
BP and France-based TotalEnergies have acquired development rights to four sites in Germany, with a joint investment of €12.6 billion . Three of these sites, which are located 120 kilometers northwest of Heligoland in the North Sea, are intended to develop 2 GW offshore turbine capacity. The fourth site, located in the Baltic Sea, has a capacity of 1 GW.
BP has obtained the rights to develop two of these projects, which represent more than half of the total capacity of 4 GW. For its part, TotalEnergies has been awarded the development rights to the other two sites.
This development aligns perfectly with the British company’s strategy to integrate and diversify its energy portfolio, with a focus on disciplined capital allocation and profitability. The company anticipates a 6-8% return on this project, reinforcing its goal of becoming a profitable player in the electricity markets.
Notably, BP is taking advantage of the global transition to cleaner, more sustainable fuels. Germany is now the scene of an initiative that marks a milestone in the company’s plans to reduce its carbon emissions .
To finance this project, the company will make an initial payment of 678 million euros, equivalent to 10% of the amount of the offer. This payment will be made before July 2024 and the balance will be paid over the next 20 years, once the projects are operational.
This development underscores the attractiveness of offshore wind investments in Germany, a country that is leading the way in the transition to renewable energy . In fact, around 90% of the proceeds from the tender are expected to go towards reducing electricity costs and implementing marine protection measures.
In the broader picture of the energy sector, BP maintains a strong position with a rank of Zack #3 (Hold). However, there are other players in the energy space that are ranking better, such as Oceaneering International, Inc. and Seadrill Limited, which currently have a Zacks Rank of 1 (Strong Buy).
Source and photos: https://www.ogv.energy/news-item/bp-makes-foray-into-continental-europe-s-offshore-wind-market
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