Wind Energy – Germany
Oil majors BP and TotalEnergies emerged as the winners in a 7 gigawatt (GW) offshore wind site auction in Germany worth 12.6 billion euros ($13.96 billion).
The move comes as European oil giants seek to grow their low-carbon businesses by entering the renewables sector, a market traditionally dominated by utilities, even though returns for solar and wind projects have come under pressure in recent years due to supply chain constraints and rising interest rates.
“The results confirm the attractiveness of investments in offshore wind power in Germany,” said Klaus Mueller, president of Germany’s energy regulator Bundesnetzagentur.
He called the move an important step towards reaching a national offshore capacity goal of 30 GW by 2030.
Three sites in the tender for building 2 GW of offshore turbine capacity are located around 120 km (75 miles) northwest of the island of Heligoland in the North Sea and one with 1 GW lies in the Baltic Sea, some 25 km away from the island of Ruegen.
BP won the rights to develop two projects, marking its entry into offshore wind in continental Europe and representing 4 GW out of the total, it said in a separate statement.
“This is a significant milestone for BP, showing our commitment into an integrated energy company,” BP head of offshore wind Matthias Bausenwein said.
The power from the windfarms will be used to produce low-carbon, or green, hydrogen and biofuels as well as to supply BP’s electric vehicle charging network, he said.
Awards for the other two sites, which include rights to develop, build and operate the plants and to receive network connections, went to TotalEnergies, the French company said in a statement.
BP’s initial payments totalling 678 million euros, equivalent to 10% of the bid amount, will be paid by July 2024. The remaining 90% will be paid over a 20-year period when the projects become operational.
TotalEnergies said it will pay the German Federal government 582 million euros, adding an annual contribution would also be paid to the electricity transmission system operators in charge of connecting the projects for 20 years from the sites’ commissioning.
