Octopus Energy has today unveiled a £3bn fund dedicated to developing offshore wind assets through its generation arm.
Backed by a £190m injection from Japanese energy giant Tokyo Gas, the fund will be focused on the development, construction and maintenance of offshore wind farms including both traditional seabed-fixed and floating offshore wind turbines.
The money is the latest tranche of the UK energy provider’s £15bn dedication to developing the sector by 2030, a plan first unveiled by City A.M. in July this year.
Zoisa North-Bond, chief executive of Octopus Energy Generation said: “This latest partnership further deepens Octopus Energy’s relationship with Tokyo Gas — and we look forward to welcoming on board more investors so together we can tap into this huge offshore wind opportunity worldwide.”
Octopus has dived headfirst into offshore wind since its market entry last year, with stakes in Hornsea One and Lincs in the UK. Since then it has rapidly scaled its activity, backing one of Europe’s largest farms, Borssele III & IV in the Netherlands.
The announcement, however, comes at a time when the UK, the second-largest offshore wind industry globally, is licking its wounds.
Rising interest rates and raw material costs have hiked up bills for infamously highly costly projects, which has led to developers backing out of deals.
In July, Swedish developer Vattenfall halted the 1.4GW Norfolk Boreas project, set to power 1.5 million homes on completion, citing a 40 per cent rise in project costs.
The higher operating costs are global; last week, Orsted, the world’s largest wind developer, announced it was pausing two major US projects for similar reasons.
But the UK is simultaneously experiencing a drop in demand for its offshore wind projects, with zero developers bidding for contracts in the last round of bidding two months ago.
In an effort to shore up interest, the government today announced a 66 per cent increase in subsidies for those looking to invest in the sector in British seas.