IKEA Store Operator Invests in Offshore Wind and Hydrogen to Restore Baltic
The largest operator of IKEA stores, Ingka Group which accounts for about 90 percent of IKEA’s worldwide retail sales, is increasing its investments in offshore wind as part of a company-wide Energy Transformation commitment. Ingka announced its third offshore investment with OX2, a Swedish renewable energy company.
Ingka will acquire for an initial payment of approximately $22 million a 49 percent stake in two next-generation Swedish offshore wind projects currently under development. The transaction includes the offshore projects Pleione located east of Gotland and Neptunus located southeast of Blekinge, which amounted to 2.4 GW in OX2’s development portfolio in Q3 2023. Following successful permitting for the projects, OX2 will in addition receive a pre-agreed deferred consideration of approximately $68,0000 per MW for 49 percent of the planned capacity. Following the completion of the transaction, the development costs for the projects will be shared according to the respective party’s ownership.
In addition to the offshore wind farms, the companies highlight that they will investigate the establishment of offshore hydrogen production facilities. They are exploring these facilities and how this can enable artificial oxygenation of the Baltic and thereby bring back marine life to parts of the Baltic that suffer from anoxic conditions.
OX2 and Ingka Investments are also currently exploring future opportunities in the Swedish market including the project Ran located near Pleione. Today’s transaction is the third investment by Ingka with OX2. In June they acquired a 49 percent stake in three offshore projects in Finland and in 2022 invested in three offshore projects in Sweden. Separately in October, Ingka Investments purchased a 20 percent stake in a 10GW offshore wind energy to electric and hydrogen production portfolio from UK-headquartered Source Galileo.
The investments are part of the company’s energy strategy for its operations and overall contribution to decarbonization. It follows a similar strategy to other large corporations such as Amazon which are also investing in renewable energy to power their operations.
“Today we produce more renewable energy than we consume across our operations and we are going one step further with our renewable energy commitment,” said Juvencio Maeztu, Deputy CEO and CFO of Ingka Group (IKEA).
Briefing investors he highlighted the offshore wind investment is part of an additional €1 billion investment commitment made today in the company’s energy transformation. It is in addition to previous commitments to invest €6.5 billion in renewable energy. In addition to the recent investments in wind farms and offshore wind development, the company is investing in solar parks with its renewable energy investments spanning Australia, Finland, and Italy.
Ingka is the largest franchise operator of IKEA with retail operations in 31 markets and encompassing 482 stores. For the stores, shopping centers, warehouses, distribution centers, officers, and other buildings they are investing in retrofits with renewable heating and cooling systems. The company also recently launched its first-ever battery storage project at a location in Texas.