bp and JERA join forces to create global offshore wind joint venture

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.

The combination will create a global business, to be called JERA Nex bp, with a balanced mix of operating assets and development projects with 13GW potential net generating capacity, the companies said in a statement on Monday.

The new company 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 said.

Pipeline of quality projects

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.

“Offshore wind has significant potential and is a critical component of the energy transition. The sector is at an inflection point, and we believe the transformative partnership launched today between our two companies combines the resources, capabilities, and network necessary to be a world-class offshore wind company, and in doing so, realise the potential of offshore wind globally, while positioning this business for long term success,” said Yukio Kani, CEO of JERA.

“Today’s announcement also demonstrates JERA’s commitment to the offshore business in Europe, Japan and the rest of the world and is a natural evolution of our strategy that places collaboration at the heart of our approach to renewables,” he added.

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.

Clear funding framework

“We are very pleased to have reached agreement with JERA to form a top five wind developer globally.  This will be a very strong vehicle to grow into an electrifying world, while maintaining a capital-light model for our shareholders. We very much look forward to combining our strengths in Europe and Asia-Pacific to create another innovative platform,” said Murray Auchincloss, bp CEO.

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.

William Lin, bp executive vice president for gas & low carbon energy, added: “Building on our successful cooperation over many years, this will bring together bp and JERA's complementary businesses to create scale, with a mix of high-quality operating assets and development projects. JERA Nex bp will be a major offshore wind player – developing the most competitive projects, continually high-grading its portfolio, investing with tight discipline, and securing optimal offtake arrangements.”

Longstanding partners

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.

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).

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.