Masdar Invests $858M in U.K. Offshore Wind

Yesterday Masdar announced its partnership with two Norwegian firms in the Dudgeon offshore wind farm, located off the Norfolk coast in Eastern England. Valued at £1.5 billion (around US$1.9 billion or AED 8.95 billion), the wind farm will provide enough energy to power 410,000 homes in the U.K.

Masdar, Abu Dhabi's renewable energy company, acquired a 35 percent stake in the project from Statoil, a Harstad, Norway-based oil and gas company. Statoil remains as operator of the project with a 35 percent stake, with the remaining 30 percent owned by Statkraft -- an international hydropower company and Europe’s largest generator of renewable energy.

“As the only OPEC nation supplying both traditional and renewable energy to international markets, the United Arab Emirates is committed to accelerating the use of wind energy as an effective means of balancing the global energy mix as we move toward a sustainable, low-carbon future,” Dr. Sultan Al Jaber, chairman of Masdar, said in a statement.

Al Jaber, along with Ed Davey, U.K. Secretary of State for Energy & Climate Change, Statoil CEO Helge Lund and Statkraft CEO Christian Rynning-Tonnesen, announced the investment on the sidelines of the United Nations’ Climate Change Summit in New York.

As we've reported here on Triple Pundit, Masdar has already invested billions of dollars in a sustainable future for the UAE. Notable projects range from massive solar power plants and energy-efficient desalination to the ultra sustainable Masdar City in Abu Dhabi. The company has also branched out to renewable energy undertakings elsewhere, including Africa's largest solar plant and the Republic of Seychelles' first offshore wind project, which both came online last year.

The 402 megawatt Dudgeon project will be Masdar's second major investment in U.K. offshore wind energy. The company also has a 20 percent stake in the 630 megawatt London Array project, the world’s largest offshore wind farm, which also went online in 2013. (For more information on that project, check out our exclusive interview with Dr. Sultan Al Jaber.)

While alignment with the project is clear for Masdar and Statkraft, an oil and gas giant may seem a less likely investor at first, but Statoil CEO Helge Lund said everyone has a role to play.

“The Dudgeon Project represents an important part of Statoil’s renewable energy strategy, and it will generate value to the owners, the offshore wind industry and the U.K. community. Statoil brings extensive offshore competence, while Statkraft brings expertise from the power generation industry. Masdar’s experience and ambitions within renewable energy will add to the quality in this project,” Lund said yesterday in a statement.

It's also worth noting that the oil and gas industry is beginning to take more interest in renewable energy investment overall: U.S.-based oil and gas companies invested roughly $9 billion in renewable technologies from 2000 to 2010, according to data compiled by the Independent Oil and Gas Association of West Virginia (scroll to page 8). Betting on offshore wind power in the U.K. is also a pretty solid investment -- and one that's expected to pay dividends.

The nation is the world’s leader of installed, offshore wind power capacity. Not resting on its laurels, the U.K. government recently agreed to financially support eight new, large-scale renewable energy projects that will power millions of homes – five of them being offshore wind farms (Dudgeon included). The projects are expected to add 4.5 gigawatts of clean energy capacity to the grid – enough to power more than 3 million homes.

Masdar said the decision to become a partner in Dudgeon underscores its belief that "the U.K. represents a major market for investment in offshore wind energy." U.K. Energy and Climate Change Secretary Ed Davey agreed that attracting major investors is a signal that the U.K. government is doing something right when it comes to offshore wind power, providing additional incentive to the rich wind energy potential along its coasts.

“[The] investment is a strong endorsement of the U.K. as the best place in the world to invest in offshore wind – and it shows the government’s plan for green growth is working. Since 2010 we have seen, on average, £7 billion a year invested in renewables and we expect to see up to £50 billion more between now and 2020,” Davey said in a statement.

Offshore construction on the Dudgeon project is scheduled to start in 2016, and it is expected to be fully operational in late 2017, Masdar said.

Image courtesy of Masdar

Based in Philadelphia, Mary Mazzoni is a senior editor at TriplePundit. She is also a freelance journalist who frequently writes about sustainability, corporate social responsibility and clean tech. Her work has appeared in the Philadelphia Daily News, the Huffington Post, Sustainable Brands, Earth911 and the Daily Meal. You can follow her on Twitter @mary_mazzoni.