bp is moving into offshore wind for the first time with a new strategic partnership with Equinor. Its first deal will be to develop major assets with the potential to power more than 2 million homes in the US. We find out more about the Equinor partnership and the potential of offshore wind energy to help meet the world’s climate goals
With 11 days until Climate Week NYC, bp has announced a new strategic partnership with Equinor to develop major offshore wind assets in the fast-growing US market and to jointly pursue further offshore wind opportunities in the country.
This announcement marks bp’s first venture into offshore wind – a clean energy source which is forecast to grow six-fold globally in the next 10 years, according to BloombergNEF.
The move comes a month after bp announced a new strategy, which includes the ambitious aim to increase annual low carbon investment 10-fold to around $5 billion a year by 2030. And grow developed renewable generating capacity from 2.5 gigawatts (GW) in 2019 to around 50GW by 2030.
The potential in the offshore wind market is huge, according to executive vice president for gas and low carbon energy, Dev Sanyal, who struck the deal worth $1.1 billion with Equinor.
Estimates suggest the offshore wind sector is forecast to grow from ~30GW today to ~190GW by 2030, the fastest growth rate of all renewable energy sectors, according to BloombergNEF.
With wind an abundant resource, aided by a supportive regulatory environment and rapid cost reductions, offshore wind looks set to rocket.
And the US is pioneering in the offshore wind space, looking to develop 30GW by 2030. In fact, American Wind Energy Association analysis found that developing 30GW of offshore wind could support up to 83,000 jobs and deliver $25 billion annually in economic output by 2030.
“This is an important early step in the delivery of our new strategy and pivot to truly becoming an integrated energy company. Offshore wind is growing at around 20% a year globally and recognized as being a core part of the world’s need to limit emissions. Equinor is a recognized sector leader and this partnership builds on a long history between our two companies. It will play a vital role in allowing us to deliver our aim of rapidly scaling up our renewable energy capacity, and in doing so help deliver the energy the world wants and needs.”
Bernard Looney, chief executive officer
The strategic partnership includes the development of existing offshore wind licence interests on the US East Coast and to jointly pursue further opportunities for offshore wind in the US.
“This partnership provides an extraordinary opportunity for our two companies to work together in pursuit of our shared ambitions ̶ creating cleaner, better energy for the world. It will leverage bp’s trading expertise and onshore wind experience with Equinor’s sector-leading track record in offshore wind to deliver value for our shareholders. We look forward to exploring further opportunities in the fast-growing US wind markets.”
Dev Sanyal, executive vice president of bp gas and low carbon energy
Key facts of the deal
- bp will purchase a 50% interest in Equinor’s Empire Wind and Beacon Wind assets; with Equinor remaining as the operator.
- bp has agreed to pay $1.1 billion
- Empire Wind is located offshore New York City, with a total area of 80,000 acres and is expected to have an installed capacity of 2 gigawatts (GW) – providing clean and reliable energy to more than 1 million homes.
- Beacon Wind is located offshore Massachusetts state with a total area of 128,000 acres and is expected to have an installed capacity of 2.4 gigawatts (GW) – providing clean and reliable energy to more than one million households.
- Subject to customary regulatory and other approvals, the deal is expected to close in early-2021.