UK Gets $14B Investment for World’s Largest Wind Farm from RWE and UAE
UK Prime Minister Rishi Sunak celebrated the news of a £11 billion (US$13.9 billion) investment agreement between Germany's RWE and the United Arab Emirates’ state-owned renewables company Masdar during a whirlwind 11-hour visit to Dubai for the COP28 conference on Friday, December 1. News of the agreement for the joint investment in what is billed as the world’s largest wind farm comes at a critical time of the offshore wind and is seen as a vote of confidence for the beleaguered industry from a global investor.
Under the terms of the agreement, which was signed on the sidelines of the COP28 conference, the Abu Dhabi Future Energy Company PJSC, known as Masdar, agreed to acquire a 49 percent state in RWE’s massive 3 GW Dogger Bank South projects. The companies said they were committing to an £11 billion investment in the UK’s renewable energy sector. RWE will continue to own a 51 percent stake in the project and will be responsible for overseeing its development.
“This is a huge boost for UK renewables,” said Sunak speaking to reporters at a press conference at COP28. The UK remains the leader in Europe for offshore wind energy, although it lost global leadership to China. There have been questions in the UK if Sunak’s government was hedging on its commitment to renewable energy after the PM announced plans to “max out” the UK’s oil and gas reserves in the North Sea. He committed to granting further drilling licenses to the oil sector.
In September 2023, the UK staged its sixth auction for offshore wind and it failed to attract any bids. Developers cited rising costs and other financial pressures in their decision not to participate while reports called it a “monumental failure” for the government. They were blamed for not adjusting the pricing mechanism, but in November reported that they would reset pricing significantly higher in 2024 for the next round of auctions.
Commenting on the agreement to invest in the UK offshore wind sector, HE Dr. Sultan Al Jaber, UAE Minister of Industry and Advanced Technology, Chairman of Masdar, and COP28 President, said, “The world needs to triple renewable energy capacity and double energy efficiency by 2030 if we are to keep the Paris Agreement goal of limiting temperature rises to 1.5 degrees within reach. At COP28, as we strive to form a unified plan to deliver the urgent course correction the planet needs, projects such as Dogger Bank South show how nations, companies, and communities can join forces to deliver powerful solutions. It also shows the deep bonds between the UK and UAE.
The International Renewable Energy Agency has estimated that offshore wind energy could generate 380 GW by 2030, provided investment is increased and permitting protocols are accelerated. The UK currently has approximately 14 GW of installed capacity with the government reporting it is committed to reaching 50 GW by 2030.
RWE entered into Agreements for Lease with The Crown Estate in January 2023 for two areas which will make up the project they have named Dogger Bank South. It will be located more than 60 miles off the northeastern coast of England in the North Sea and split into two sites. Each will have the capacity for 1.5 GW. RWE highlights that Masdar will join the project at a key stage as they approach the end of the consultation with stakeholders and plans for the project will likely be submitted in the second quarter of 2024. They note that construction could begin as early as 2025 with the first 800 MW planned to come online in 2029 and full commissioning of the projects by late 2031.
RWE and Masdar already have an active partnership in global offshore wind. A year ago they committed to working jointly to explore offshore wind projects both in and outside Germany. Masdar has also been active in the offshore wind sector, including a previous UK investment in the 630 MW London Array as well as other projects.
Dogger Bank is already home to a giant wind farm which is being developed by SSE Renewables in a joint venture with Equinor and Vargrønn. SEE is leading the development and construction which is well underway while Equinor will be the lead operator. Dogger Bank A which is part of an overall plan for 3.66 GW achieved first power in October 2023 as the first of 277 of GE Vernova’s Haliade-X 13 MW turbines became operational. It is one of the most powerful wind turbines in the world with the company highlighting that each rotation of the 351-foot blades can produce enough energy to power an average British home for two days.