Octopus Energy Generation has made its first investment in a large UK offshore wind farm, helping to accelerate the UK’s journey to energy independence.
The rapidly growing renewable energy group has bought a c.8% stake in the 270 MW Lincs offshore wind farm off the coast of Skegness in the east of England. The wind farm, which has been operational since 2013, is made up of 75 wind turbines across 35 square kilometres, and is operated by global renewable energy developer Ørsted.
It generates enough energy to power 240,000 UK homes a year. This equates to taking nearly 200,000 petrol cars off the road and avoiding over 350,000 tonnes of carbon emissions every year.
The acquisition of this stake in the Lincs offshore wind farm has been agreed and is expected to complete in Q2 2022. The deal was led by Partha Vasudev, head of offshore wind in Octopus Energy Generation’s fund management team.
Offshore wind is one of the pillars of the UK government’s plans to boost Britain’s energy security. The UK already has 11GW of offshore wind and in its recent Energy Security Strategy, the government raised the target for offshore wind to 50GW by 2030 and announced reforms to streamline the process for planning and connecting offshore wind farms to the grid. This comes as costs for offshore wind in the UK have fallen by around two thirds over the last eight years.
Octopus has also been ramping up its activity in new innovative technologies like floating offshore wind turbines. Octopus invested in floating offshore wind developer Simply Blue Group in 2021, taking a 24% stake to speed up the company’s expansion in the UK and abroad.
Simply Blue has grown five-fold over the last 18 months and has scaled its global pipeline of floating offshore wind projects to 9GW, with 3GW in the UK and Ireland. In recent projects, Ørsted joined the Simply Blue Group and Subsea 7 joint venture for the Salamander floating offshore wind development off the Scottish coast.
Zoisa North-Bond, CEO of Octopus Energy Generation, said: “We’re extremely excited to make our first green waves in offshore wind energy – a key pillar of the UK’s renewable energy mix. The UK has tremendous offshore wind resources. By backing a large offshore wind farm as well as developing floating offshore wind power, we’re tapping into this vital technology to accelerate our journey to energy independence.
“We’re dipping our toe in the water with this investment – but this is only the beginning. We’ve got big ambitions and innovative ideas for offshore wind and are going to massively ramp up our activities in this area over the coming 12 months.”
Octopus Energy Generation is already one of the largest investors in renewable energy in Europe. More broadly, Octopus Energy Group has been stepping up its generation capabilities, with plans to create 18 gigawatts of clean energy generation projects by 2027.
In December 2021, Octopus Energy Group was valued at approximately $5bn following a $600m investment from Generation Investment Management and a $300m investment from Canada Pensions Plan Investments Board. Both investors back businesses that drive sustainability, promote green energy and tackle climate change. It was the company’s third major investment round since launching to the market.