bp and Energie Baden-Wuerttemberg AG (EnBW) of Germany have together emerged as the preferred bidder for two major leases in the UK Offshore Wind Round 4. Both these leases are located in the Irish Sea and together offer a total potential to generate 3 GW of offshore wind power. This is the first such UK leasing round since 2010 and offers a 60-year lease life.
The two locations have strong wind resources. They are also in close proximity to the shore, just 30 kilometres off the coast of North West England and North Wales, which will result in low-cost transmission infrastructure. In addition, the water depths are relatively shallow at 35-40 meters which will enable cost-effective development. These factors together make the two leases attractive investment opportunities. The agreements for leases are expected by Spring 2022.
bp and EnBW intend to jointly develop and operate the leases. For this purpose, they plan to form a 50-50 joint venture which would make four annual payments of £231 million on each lease before projects reach final investment decision. The offshore wind projects are expected to be operational in seven years and together would be sufficient to supply clean power to more than 3.4 million UK households.
bp already operates nine onshore wind assets in the US with a total capacity of 1.7 GW and has also formed a partnership with Equinor to develop offshore wind projects in the country. These would include the Empire Wind and Beacon Wind projects off the East Coast of the US with a planned potential of 4.4 GW of offshore wind capacity. Meanwhile, EnBW operates four offshore wind assets in the German Baltic Sea and North Sea and has onshore wind projects in Germany, France and Sweden.