bp & EnBW Selected for 3 GW Offshore Wind Leases in the UK

Offshore Wind farm

bp and partner EnBW have been selected as the preferred bidder for two major leases in the UK Offshore Wind Round 4 for projects worth 3 GW.

bp and partner 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. The leases, both located in the Irish Sea, offer a combined potential generating capacity of 3 gigawatts (GW), the maximum award possible under the rules of the round, and a 60-year lease life.

The latest win marks bp’s entry into the UK’s offshore wind power sector, currently the largest in the world. 

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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. Once the projects are operational, this generating capacity would be sufficient to power more than 3.4 million UK households with clean electricity.

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.

“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,” he added.

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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 GBP 231million on each lease before projects reach final investment decision. Projects are expected to be operational in seven years.

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.

Frank Mastiaux, chief executive of EnBW, added: “We are delighted with this auction win in a tough international bidder field. The award confirms that bp and EnBW are the right partners with the right strategy and the right capabilities.”

The Crown Estate will undertake a Plan-Level Habitats Regulations Assessment (HRA) of the Round 4 leasing plan, and subject to the outcome of the HRA, agreements for leases are expected by Spring 2022.