Posted on December 12, 2024
bp and JERA Co., Inc. have agreed to combine their offshore wind businesses to form a new standalone, equally-owned joint venture that will become one of the largest global offshore wind developers, owners and operators, according to bp’s release. The combination will create a global business, to be called JERA Nex bp, with a balanced mix of operating assets and development projects with total 13GW potential net generating capacity.
Formation of JERA Nex bp is intended to accelerate development from the combined pipeline and bolster access to competitive financing. Supporting this, the partners have agreed to provide capital funding for investments committed to before end of 2030 of up to $5.8 billion.
The companies will contribute interests comprising operating assets with around 1GW net generating capacity, a strong pipeline of high-quality development projects with around 7.5GW capacity, and further secured leases with around 4.5GW of potential capacity. JERA Nex bp will pursue value-driven development of competitive projects, as well as optimising its extensive combined portfolio. Initially it is expected to focus on progressing existing projects in North-West Europe, Australia and Japan, and to continue to mature the development pipeline of significant longer-term opportunities.
The two partners have aligned expectations for the business to progress through disciplined and value-driven development, and have agreed a clear funding framework for the rest of this decade to underpin this. This includes leveraging asset revenues and accessing competitive financing itself, as well as proceeds from portfolio management. The equity investment contributed by the partners may be lower than the total agreed gross funding depending on project and venture financing and proceeds from asset farm-downs and sales.
JERA Nex bp is expected to benefit from the existing relationships and partnerships that the two shareholders have worldwide, including across the supply chain. The business will also draw on and benefit from the global trading capabilities of both partners to manage and market power from its assets into various offtake channels. Longstanding partners combining in offshore wind bp and JERA, and its shareholders Tokyo Electric Power Company (TEPCO) and Chubu Electric Power, have a very long history of partnership, both historically in LNG and more recently in pursuing possibilities for cooperation in solar, hydrogen and low carbon fuels.
JERA first entered the offshore wind market in 2019 through investments in projects in the UK and Taiwan. In 2023 it acquired Belgium offshore wind player, Parkwind, and later used this business as a platform to spin out a focused renewables vehicle, JERA Nex, created to pursue the renewables target in JERA’s 2035 growth strategy. It owns and operates wind farms in Belgium, Germany, Japan and Taiwan and has a development portfolio that includes projects in Japan, Ireland, and Australia. bp has been building a portfolio in offshore wind since 2019, and now has a development pipeline with total potential generating capacity of 9.7GW net (5.7GW development projects and a further 4GW secured leases). Development projects are the Morgan and Mona projects in the UK Irish Sea, and Oceanbeat East and Oceanbeat West in Germany’s North Sea, with secured leases off Scotland and the east coast of the US. JERA Nex bp will be based in London. Its CEO will be nominated by JERA and the CFO by bp. On completion, offshore wind teams from both JERA and JERA Nex and staff from bp’s offshore wind business will be expected to move into the new business.
The parties have agreed to work to complete formation of JERA Nex bp, subject to regulatory and other approvals, with completion expected by end of the third quarter of 2025.
