Energy company Equinor and its partners have agreed to bring two offshore wind projects under a joint ownership structure as one legal entity.
Subject to regulatory approvals, the Sheringham Shoal and Dudgeon offshore wind power plant extension projects will be developed as a single project. Equinor said that merging the two joint ventures (JVs) will derisk the development for generation and transmission, and help “unlock further opportunities”.
Currently, the Dudgeon Extension Project is 35% owned by Equinor, 35% by Masdar and 30% by China Resources Power. The Sheringham Shoal Extension project is 100% owned by Equinor with Equitix Offshore 3, which is co-owned by funds managed by Equitic and the Renewables Infrastructure Group, and Macquarie Asset Management, through the Macquarie GIG Renewable Energy Fund 1, having options to acquire a total of 60% interests at final investment decision (FID).
A spokesperson for the option holders said the firms support the “innovative merger”.
The Sheringham Shoal and Dudgeon wind farms are both already operational, but the extensions would double the plants’ capacity and, Equinor said, bring the direct gross value added to the UK economy by the projects to £370 million.
Development consent approval for both extensions was granted in April this year. It was the first time in the UK that two offshore wind projects under separate ownership received consent under a joint application; the consent allowed for single, joint or sequential development options.
Husain Al Meer, Masdar’s director of global offshore wind and UK operations, said: “The establishment of this joint venture will streamline operational efficiencies, and in doing so, accelerate the development of additional offshore wind capacity for the British economy.”
Equinor said the new ownership structure would enable cost-effective joint development of the two projects. According to the company’s vice president of UK renewables Halfdan Brustad, Equinor has drawn on its experience of oil and gas unitisation and “applied key learnings to make this project more competitive”.
Equinor recently announced an incorporated JV with oil and gas major Shell that would see the two set up an independent oil and gas company for the UK, intended to “sustain domestic oil and gas production and security of energy supply in the UK”.
Equinor offshore wind
Equinor is co-developing the 2GW Dogger Bank D Wind Farm in a 50/50 JV with fellow energy company SSE. Dogger Bank D, which will build out and maximise capacity from the current Dogger Bank C site, is designated a Nationally Significant Infrastructure Project (NSIP).
However, ahead of its financial results announcement, SSE delayed commissioning of Dogger Bank A, noting that it expected its upcoming half-year results to include adjusted earnings per share of “more than 45 pence”, a figure that would compare poorly to the adjusted earnings per share of £1.59 reported in the year to 31 March 2024.
Similarly, Shell announced it would step back from offshore wind development and focus on offtake contracts, suggesting that offshore wind is increasingly unattractive as a result of increased costs, supply chain issues and rising interest rates that have narrowed profit margins.
