Octopus Energy will team up with institutional investors to spend $20bn (£15.6bn) on offshore wind projects over the rest of the decade, City A.M. can reveal.
The funds will be channelled through its renewables arm, Octopus Energy Generation, and targeted at the development, construction and operation of offshore wind turbines.
This will help Octopus reach its goal of generating 12GW of renewable electricity a year, which is enough to power 10m homes.
It will be sourced from both Octopus’ own resources– with the energy giant including former US vice-president Al Gore’s Generation Investment Management among its backers – and partners such as pension funds
Octopus is open to new projects across the globe, but its primary focus will be Europe including the UK, although it has not provided a breakdown of where the money will be spent.
The company’s generation arm currently manages £6bn worth of green energy projects worldwide.
It first entered the offshore market in April 2022, with an initial eight per cent stake in the Lincs offshore wind farm, which generates enough clean power for 240,000 homes every year.
Octopus has since spent around £800m on five further offshore deals, including another stake in one of the world’s largest wind farms, Hornsea One and the acquisition of the Borssele V wind farm in the Netherlands, which has some of the world’s largest turbines.
It also backs Simply Blue, a developer of floating offshore wind projects, which are typically secured by cables and can tap into strong winds deeper out at sea.
The energy giant is on course to announce a new ‘fan club’ for offshore wind, where coastal communities near new developments will receive discounted energy at times of abundant wind – such as for customers living in Grimsby and Skegness near its Lincs site.
This year alone, homegrown offshore wind has already produced 14 per cent of Britain’s electricity according to government data, while industry reports suggest the offshore wind sector will create over 100,000 jobs by 2030 in the UK.
Zoisa North-Bond, chief executive of Octopus Energy Generation, said: “Offshore wind has already rapidly transformed the UK’s energy system – and we’re incredibly excited about the potential for this technology globally. We’ve got big plans to invest in even more of these big fans to help wean ourselves off polluting gas.”
The news will be a boost for the UK’s renewable industry, following Vattenfall’s decision to pull out of a new wind farm off the Norfolk coast which could have powered 1.5m homes.
There are also worries within the sector that the current allocation round for new projects, was funded sufficiently to prevent higher generation prices – a growing concern with the government targeting 50GW of offshore wind generation in its energy security strategy.
Trade association Renewable UK is calling for the government to invest in bolstering domestic supply chains, while the government is considering reforming auctions so that they also take into account wider social benefits alongside generation costs.