BP Enters UK Offshore Wind Market as Seabed Leases Hit Record Prices -- Update

--BP entered the U.K. offshore wind market in the latest auction of seabed rights

--Oil majors BP and Total both bid as they seek low-carbon energy projects

--SSE missed out on leases and said bidding was at record high levels

By Jaime Llinares Taboada

Oil majors BP PLC and Total SE were among the successful bidders in the U.K.'s latest auction of seabed leasing rights for offshore wind projects, as pressure to develop low-carbon energy drove up bid prices.

A consortium between BP PLC and EnBW Energie Baden-Wuerttemberg AG was the successful bidder for two projects with a combined capacity of three gigawatts, the maximum award. BP said the bid marks its entry into the U.K. offshore wind sector and the projects are expected to be operational in seven years.

BP and EnBW were the highest bidders and will pay 154,000 pounds per megawatt per year, or an annual fee of 462 million pounds ($635 million) for the projects.

The leasing round was the U.K.'s first auction of offshore rights since 2010. The Crown Estate said successful bidders have committed to aggregate initial investment of GBP879 million pounds.

Total's joint venture with Macquarie Group Ltd.'s Green Investment Group was awarded rights for a 1.5 gigawatt project.

Germany's RWE AG won two licenses for a combined 3 gigawatts of capacity in the auction, while a partnership formed by Cobra Instalaciones y Servicios, S.A. and Flotation Energy plc won a 480 megawatts license.

The rest of the successful bids ranged from RWE's GBP76,203 to Cobra-Flotation's GBP93,233 per megawatt and year.

U.K. energy company SSE was unsuccessful in the auction and said bids represented record high levels for these tenders. SSE, which is aiming to develop at least one gigawatt of renewable capacity per year during the second half of the decade, said it will continue to pursue opportunities in the U.K. and abroad.

Write to Jaime Llinares Taboada at [e-mail]; @JaimeLlinaresT

(END) Dow Jones Newswires

February 08, 2021 05:39 ET (10:39 GMT)

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