BP, JERA joining forces to create top global offshore wind joint venture. (Photo: BP/JERA)
BP and Japan's JERA announced on Dec. 9 that they plan to invest $5.8 billion by the end of 2030 to integrate their respective offshore wind businesses through a joint venture. The new company is expected to become one of the world’s largest developers and operators in the industry.
BP, JERA to merge offshore wind businesses
According to a joint press release, the two companies will transfer their offshore wind businesses into a new company called JERA Nex bp, with each holding a 50% stake. The joint venture will have a potential net power generation capacity of 13 GW across current assets and development projects, with a focus on North-Western Europe, Australia, and Japan.
With an installed capacity that includes ongoing development projects, the newly established JERA Nex bp will become the fourth-largest player in the industry, while Denmark’s Ørsted remains the leader.
Satoshi Yajima, head of JERA’s Global Renewable Energy Division, admitted at a press conference that it has become increasingly difficult to achieve initial profit targets due to challenging operational environments and rising material costs. He said, “We decided to enhance competitiveness by pursuing economies of scale.”
The JERA Nex bp will be based in London, with the CEO appointed by JERA and the CFO by BP. The new company still requires approval from relevant regulatory authorities and is expected to complete the transaction by the third quarter of 2025.
JERA admits that the operational environment for offshore wind power is challenging, and therefore has decided to enhance its competitiveness through economies of scale. (Photo: iStock)
Oil giants face headwinds in green strategies
JERA entered the offshore wind market in 2019 through investments in projects in the UK and Taiwan, and last year acquired the Belgian offshore wind company Parkwind.
However, compared to its oil and gas operations, offshore wind has been less profitable. Due to pressure from investors, JERA announced earlier this year that it would pause new business development, recruitment, and sell its U.S. onshore wind division.
BP also began building its offshore wind portfolio in 2019 but following the departure of former CEO Bernard Looney last year, the company has faced operational challenges. Since the beginning of this year, BP’s stock has dropped more than 15% on the London Stock Exchange.
The new CEO, Murray Auchincloss, has been reducing green investments, including abandoning earlier commitments to cut oil and gas production by 2030.
Other oil companies, including Shell and Norway’s Equinor, have also slowed down their energy transition efforts. Equinor announced last month that it would cut 20% of its renewable energy division workforce, while Shell stated on Dec. 4 that it would not make new investments in offshore wind but would retain its existing wind farms in Europe, the U.S., and the UK.
Source: Nikkei Asia, Offshorewind Biz, Euronews
