Octopus Energy has unveiled a groundbreaking initiative with the launch of the Octopus Energy Offshore Wind fund, aiming to invest a substantial $3.5 billion (£3 billion) in offshore wind projects by the close of this decade. This announcement brings a ray of optimism to an industry grappling with challenges such as regulatory hurdles, rising costs, and disruptions in the supply chain.
The management of the fund will be a collaborative effort between Octopus Energy's generation arm and Tokyo Gas, a major player in the Japanese energy sector that currently holds nearly 10% ownership in Octopus. Tokyo Gas has already demonstrated its commitment by injecting $220 million (¥32.67 billion) into the venture. Octopus Energy plans to secure the remaining funds from external investors.
Zoisa North-Bond, the CEO of Octopus Energy Generation, emphasized the immense potential held by offshore wind, stating, “This latest partnership further deepens Octopus Energy's relationship with Tokyo Gas, and we look forward to welcoming on board more investors so together we can tap into this huge offshore wind opportunity worldwide.”
The focus of fund allocation will predominantly center on projects situated in Europe, with the overarching goal of diminishing reliance on fossil fuels and enhancing domestic energy security, as outlined in Octopus Energy's official statement. The fund's scope encompasses investment in the entire lifecycle of offshore wind farms, spanning development, construction, and operational stages. It will consider both traditional offshore wind projects and innovative floating offshore wind technologies.
This initiative aligns with Octopus Energy's broader strategy, unveiled in July of this year, which aims to catalyze a staggering $19 billion in investments in the offshore wind industry by the year 2030.
Tokyo Gas, having acquired a 9.7% stake in Octopus Energy in December 2020 for $200 million, is not only a significant financial contributor but also a strategic partner in expanding Octopus Energy's reach into the Japanese market.
Kentaro Kimoto, Vice President of Tokyo Gas, articulated the company's ambitious target to acquire and trade 6 gigawatts of renewable power sources by 2030. He emphasized the commitment to expedite offshore wind development, including the exploration of floating offshore wind projects.
The global offshore wind industry has faced considerable headwinds in recent years, grappling with soaring prices that render construction and operational costs unsustainable. Challenges related to equipment reliability, supply chain disruptions, and public resistance in certain regions to coastal wind developments have further impeded the industry's growth. Against this backdrop, the Octopus Energy Offshore Wind fund emerges as a beacon of hope, signaling a concerted effort to overcome these obstacles and drive the industry towards a sustainable and resilient future.