Jul 21

TotalEnergies, Iberdrola Go for Norwegian Wind

Stephen Bierman
Nov 5, 2021
Image: Nicholas Doherty via Unsplash

The line between oil major and utility continues to blur as TotalEnergies, Iberdrola and Norsk Havvind join up to bid on offshore wind in Norway.

The group will respond to authorities’ calls for tenders for the development of floating and bottom-fixed wind projects for a cumulated capacity of 4.5 GW at two offshore sites in southern Norway, according to a joint statement

TotalEnergies, bp, Royal Dutch Shell and other oil majors have rolled out plans to boost their power businesses over the past year as they seek a transition from hydrocarbons to fight global warming. One of the keys in the fight will be major investment in wind and solar generation, for example to power future auto fleets transitioning from oil. As for the present day, the main aim is to replace coal as a fuel for generating power.

European oil producers have put offshore wind generation into focus as a way to leverage existing experience working in the ocean. TotalEnergies is no exception.

“Investing in energy projects in Norway and the North Sea has been at the heart of TotalEnergies’ history for several decades, especially in developing the offshore industry. As a global multi-energy company, TotalEnergies is therefore delighted to join forces with Iberdrola and Norsk Havvind to develop Norway’s great offshore wind potential,” said Olivier Terneaud, VP offshore wind at TotalEnergies.

TotalEnergies is already developing a portfolio of offshore wind projects with a total capacity of more than 6 gigawatts, of which 2/3 are bottom-fixed and 1/3 are floating. These projects are located in the United Kingdom (Seagreen project, Outer Dowsing, Erebus), South Korea (Bada project), Taiwan (Yunlin project), and France (Eolmed project).

The Norway-focused consortium will leverage member expertise in both bottom-fixed and floating offshore wind, as well as its in-depth knowledge of the challenges, territories and stakeholders in Norway.

While utilities themselves may see the entry of transitioning oil majors as competition, so far it appears leaders are willing to join forces in putting together capital and expertise for investments. At least leading European utility Iberdrola is game.

“This agreement in Norway fits with Iberdrola’s strategy to consolidate its position as the world’s largest renewable energy company and builds on previous transactions and investments in offshore wind carried out by the company in recent years,” said David Rowland, Offshore Wind Business Development Director at Iberdrola.

And part of that investment and expertise will be developing local supply chains and competencies. The local industry element has been a hallmark of renewable projects globally after nations have spent decades sending cash abroad for petroleum. Norway knows the game quite well as one of the nations on the receiving end of those petrodollars.

While oil majors are potential competitors to existing utilities, big ticket investment in spaces such as offshore wind is still wide open. This means that there are projects where large funding, engineering and project management competencies can work together. This is especially true of floating platform projects, which seek to place wind arrays further offshore to catch steadier and stronger winds.

Stephen Bierman

Stephen Bierman is a finance and energy reporter with over 15 years of experience, including at Bloomberg News and Energy Intelligence.

Tweets at: @StephenBierman1

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