BP, Equinor partner for U.S. offshore wind energy development

British Petroleum (BP; London, U.K.) and Equinor (Stavanger, Norway) announced on Sept. 10 the formation of a strategic partnership to develop offshore wind projects in the U.S, which will include the development of existing offshore wind leases on the U.S. East coast and jointly pursuing further opportunities for offshore wind in the U.S.

The agreement is said to have come a month after BP announced its new strategy and aim to increase its annual low carbon investment ten-fold to around $5 billion a year and grow its developed renewable generating capacity from 2.5 gigawatts (GW) in 2019 to around 50 GW by 2030.

“This is an important early step in the delivery of our new strategy and our pivot to truly becoming an integrated energy company,” says Bernard Looney, BP chief executive. “Offshore wind is growing at around 20% a year globally and is recognized as being a core part of meeting the world’s need to limit emissions. Equinor is a recognized sector leader and this partnership builds on a long history between our two companies. It will play a vital role in allowing us to deliver our aim of rapidly scaling up our renewable energy capacity, and in doing so help deliver the energy the world wants and needs.”

As well as forming the new strategic partnership, BP says it will purchase a 50% interest in both the Empire Wind and Beacon Wind assets from Equinor. BP has agreed to pay Equinor $1.1 billion.

The partnership will reportedly leverage capability and experience from both companies. Equinor will remain operator of the Empire and Beacon projects in the development, construction and operations phases. The deputy project director for Empire Wind will be nominated by BP, and over time the wind assets will be equally staffed by BP and Equinor.

The Empire Wind lease area, which was awarded to Equinor in 2016, is 15-30 miles southeast of Long Island, N.Y., and has a total area of 80,000 acres. The area will be developed in two phases, says Equinor.  Empire Wind phase one secured an offtake agreement in the July 2019 solicitation and is planned to have between 60 and 80 turbines. According to Equinor, the whole Empire Wind lease area has a potential generation capacity of 2 GW with a generating capacity of more than one million homes.

Similarly, Beacon Wind covers a total area of 128,000 acres of federal waters off New England’s coast. When fully developed it is expected to have a total generating capacity of 2.4 GW, sufficient to provide power to more than a million households in the Northeast U.S.

First power from Empire Wind’s phase one is expected in the mid-2020s and phase two is preparing for upcoming solicitations. Beacon Wind will also be developed for future solicitation opportunities and will begin a review process to secure all necessary permits for the project.

Subject to customary regulatory and other approvals, the deal is expected to close in early 2021.