Two of Europe’s leading energy companies have signed an agreement to form a joint venture (JV) to address the fast-growing global offshore wind market.
EDP chief executive and chairman Antonio Mexia and Engie chief executive Isabelle Kocher said the companies have signed a memorandum of understanding (MoU) to create a 50/50 JV that will target the fixed and floating offshore wind markets.
The new entity will be the exclusive vehicle of investment of EDP, through its subsidiary EDP Renewables (EDPR) and Engie for offshore wind opportunities worldwide and will become one of the top five companies in the sector.
Under the terms of the MoU, EDP and Engie will combine their offshore wind assets and project pipeline in the newly-created JV, starting with 1.5 GW under construction and 4.0 GW under development, with the target of reaching 5-7 GW of projects in operation or construction and 5-10 GW under advanced development by 2025.
The companies described offshore wind energy “as an essential part of the global energy transition” and expressed the belief that creating an entity with greater scale, global reach and strong purchasing power would allow them to grow their asset base more rapidly and to operate more efficiently.
The JV will primarily target markets in Europe, the US and Asia, where most growth is expected to come from. The JV’s ambition is to be self-financed and the projects that will be developed will respect the investment criteria of both companies.
The alliance follows EDPR and Engie’ six-year co-operation as consortium partners in the Dieppe Le Tréport and Yeu Noirmoutier offshore wind projects in France and Moray East and Moray West in the UK. EDPR and ENGIE are also partners in two floating offshore wind projects in France and Portugal and in the Dunkerque offshore wind tender currently ongoing in France.
Ms Kocher said, “The offshore wind sector is set to grow very significantly by 2030. The creation of this JV will enable us to seize market opportunities while increasing our competitiveness on one of our key growth drivers, renewables. This agreement is also fully aligned with Engie’s zero-carbon transition strategy.” Mr Mexia said the agreement was an important step in EDP’s renewables strategy. The groups aim for the JV to be operational by the end of 2019.