“Our access to offshore wind in Germany, Europe’s largest electric power market, is a key step in implementing our strategy for an embedded and successful player in the electric power markets,” said Patrick Pouyanné, CEO of TotalEnergies. [EPA-EFE /PASCAL ROSSIGNOL]
Oil majors BP and TotalEnergies emerged winners of an auction of 7 gigawatt (GW) offshore wind farms in Germany worth €12. 6 billion, underlining the attractiveness of renewable assets across Europe.
The move comes as European oil giants look to expand their low-carbon businesses by entering the renewable energy sector, a market historically dominated by utilities, even though returns from solar and wind projects have been under pressure in recent years due to supply chain constraints. and emerging interest rates.
“The effects verify the attractiveness of offshore wind investment in Germany,” said Klaus Mueller, chairman of German energy regulator Bundesnetzagentur. He called the move a step towards achieving a national marine capacity target of 30 GW by 2030.
Jefferies analysts pointed to the maximum value of the auction, adding that it implied “strong interest in European offshore wind sites by power companies/developers. “
Three tender sites for the 2 GW offshore turbine capacity structure are about 120 km northwest of the North Sea island of Heligoland and one with 1 GW is in the Baltic Sea, about 25 km from the island of Rügen.
BP has secured progression rights to two projects, marking its access to offshore wind in continental Europe and accounting for GW of the total, it said in a separate statement.
“This is a milestone for BP, showing our commitment to installing a built-in power company,” said Matthias Bausenwein, BP’s director of offshore wind.
Energy from wind farms will be used to produce hydrogen and green or low-carbon biofuels, as a powerhouse of BP’s electric vehicle charging network, he said.
The world’s largest oil and fuel corporations have increased their investments in blank energy by 23% compared to 2018, despite a 6% drop in global energy demand last year due to the coronavirus pandemic, according to a new study released Tuesday. (8 June).
Prizes for the other two sites, which include rights to develop, build and operate the plants and obtain grid connections, were awarded to TotalEnergies, the French company said in a statement.
“Our access to offshore wind in Germany, Europe’s largest electric power market, is a key step in implementing our strategy to become an embedded and successful player in electric power markets,” said Patrick Pouyanné, CEO of TotalEnergies.
90% of the profit from the tender will go to reduce electricity prices and marine coverage measures, the regulator said.
BP said the move fully aligned with its embodied energy strategy and disciplined capital allocation, adding that it expected allocation returns of between 6% and 8%.
BP’s initial payments, totalling €678 million, or 10% of the offer amount, will be paid until July 2024. The remaining 90% will be paid over 20 years when the projects are operational.
TotalEnergies announced that it will pay 582 million euros to the German federal government and added that an annual contribution will also be paid to the operators of the electric power transmission formula to connect the projects for 20 years from the commissioning of the sites.
Oil majors are “lagging” when it comes to the low-carbon energy transition, according to a new report from monetary regulator CDP, which nevertheless praised BP, Eni, Equinor, Total, Repsol and Shell for taking the lead in the industry. .