(Bloomberg) -- Masdar is taking a stake in RWE AG’s £11 billion ($13.9 billion) UK Dogger Bank South offshore wind farm, part of the world’s largest such project.
The UAE’s renewable energy firm is purchasing a 49% stake in the 3 gigawatt farm, a press statement said Friday. The closing of the transaction is subject to regulatory approvals and expected in the first quarter of 2024. Construction could start in late 2025, with the first 800 megawatts of electricity expected to come online by 2029, the release added.
The investment will boost the offshore wind sector, which has struggled both in the UK and globally, to fund large developments, with higher financing and component costs slowing the pace of installations. Danish wind farm giant Orsted A/S had to take huge writedowns connected to abandoned projects in the US and Norway and is under pressure to make a final investment decision on the 2.8-gigawatt Hornsea-3 wind farm off the coast of Norfolk, its largest development in the pipeline.
RWE, with its 51% stake, will remain in charge of the development, construction and operation throughout the life cycle of the projects, the statement said.
Wind farm developments in the Dogger Bank area, off the east coast of England, include SSE Plc and Equinor ASA’s Dogger Bank A, B and C projects, totaling 3.6 gigawatts of capacity. Dogger Bank South is planned to be situated near those wind farm sites.
“This is a huge boost for UK renewables, creating more jobs, helping to power 3 million homes and increasing our energy security,” UK Prime Minister Rishi Sunak said of the deal in a speech at the COP28 climate conference in Dubai.
He urged the world’s largest polluters to work toward cutting emissions, singling out China, but cautioned that “climate politics is close to breaking point” and that countries must bring the public with them by driving action in a “pragmatic and proportionate way.”
Earlier in November, the UK government raised the support price for new offshore wind farms by 66% to rekindle investment in the crisis-hit sector after this year’s auction drew zero bids from developers. Chancellor of the Exchequer Jeremy Hunt also announced that capital allowances on investments — a form of tax relief designed to ease upfront costs — will remain in place, providing an extra support for the industry.
--With assistance from Todd Gillespie.
(Updates with details.)
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