European oil majors BP and Equinor will companion up for the U.S. offshore wind market, marking BP’s first substantial transfer into the offshore wind business.

The deal will see BP paying $1.1 billion for a 50 p.c stake in Equinor’s Empire Wind undertaking off New York and its Beacon Wind undertaking off southern New England.

The Empire Wind undertaking, positioned within the area referred to as the New York Bight south of Lengthy Island, already has a 816-megawatt contract with New York state, and may maintain as much as 2 gigawatts. The undertaking is scheduled for completion in 2024 and can assist to leap begin New York’s offshore wind provide chain.

The Beacon Wind zone, positioned south of Massachusetts and received in the latest federal U.S. offshore wind lease public sale, might host greater than 2.four gigawatts of capability. That undertaking is more likely to nonetheless be going by allowing by the point Empire is delivering energy to New York.

Norway’s Equinor at present has 100 p.c possession of each leases and can function the operator of the tasks by to the operations section when staffing will finally be shared.

In February BP introduced a thinly-detailed ambition to attain net-zero emissions by 2050, below new CEO Bernard Looney. Subsequent week, BP will host a collection of capital market days, the place it would proceed to flesh out its technique in the direction of its 2050 net-zero “ambition” and its diversification away from fossil fuels.

BP has been extensively anticipated to launch into offshore wind in some unspecified time in the future. The oil big’s renewables efforts have up to now been spearheaded by its 50 p.c possession of photo voltaic developer Lightsource BP. The offshore wind take care of Equinor opens a brand new entrance in its clear power technique. BP is focusing on 50 gigawatts of renewables by 2030.

Writing on LinkedIn, Looney stated: “By leveraging [Equinor’s] abilities with our personal experience in areas like buying and selling we count on to be an excellent group. Particularly as we glance to develop extra alternatives within the U.S. over time.”

Though no formal announcement has been made, BP is anticipated to take part within the impending Scottish seabed public sale for offshore wind websites and the 2021 U.Ok. contracts for distinction public sale that can award assist for tasks.

Equinor has stakes in round 1 gigawatt of operational offshore wind tasks within the U.Ok. and Germany. Its growth pipeline, when adjusted for the dimensions of its stakes, totals 7.7 gigawatts throughout the U.S., U.Ok. and Poland.

A number of European oil majors, together with Whole, Shell, Repsol and BP, have strengthened their local weather targets and begun laying out methods to diversify into the facility sector. Offshore wind is seen as a pure match for them, given their marine engineering and operational experience gained from offshore drilling, plus the size of the person undertaking investments.

Shell has stakes in offshore wind tasks within the U.S. and the Netherlands. Whole has lately added tasks in Scotland and South Korea. 

Equinor’s floating offshore wind edge

Equinor and BP “will take into account future joint alternatives within the U.S. for each bottom-fixed and floating offshore wind,” an Equinor assertion stated. Equinor has established an early management place in floating offshore wind.

Hywind Scotland, Equinor’s 30-megawatt floating pilot undertaking has been producing energy since 2017. The undertaking has notched up a capability issue of 56 p.c. The corporate is now growing the 88-megawatt Hywind Tampen undertaking to energy two of its offshore drilling operations within the North Sea.  

In an interview with GTM final yr, Michael Wheeler, Equinor’s principal strategist for North America, talked up the potential for floating wind within the U.S.

“What we’ve seen with Hywind that’s attention-grabbing and related for California is the actually excessive capability components — we’re speaking mid-50s [percent] right here,” Wheeler stated. “That competes with, and is healthier than some, gasoline energy vegetation.”

RWE and Mitsubishi lately acquired the College of Maine’s floating wind demonstration undertaking, which might get constructed as quickly as 2023, and could be the primary floating undertaking in U.S. waters.

The large prize for U.S. floating wind, nonetheless, is California, the place the technical potential exceeds 100 gigawatts, in accordance with the Nationwide Renewable Power Laboratory (NREL). The water depths off the California coast make standard bottom-fixed foundations unusable.

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