BW Offshore, a company mainly known as the operator of FPSO vessels in the oil and gas industry, is creating what it calls "a floating offshore wind champion targeting large-scale projects," following an agreement signed Wednesday to buy into the floating offshore wind tech developer Ideol.
BW Offshore last week said it was in discussions with France-based Ideol to enter the floating wind industry, but nothing was firm at the time.
However, In a statement released on the Oslo stock exchange, fifteen minutes after midnight on Wednesday (CET), BW said it had signed a share purchase agreement to become a strategic owner of Ideol S.A." a global pure player in floating offshore wind technology, creating a renewable energy company with market-leading capabilities based on in-house developed and proven technology, supported by BW Offshore's extensive experience from development and operation of offshore energy production systems."
Ideol is a provider of floating foundations for offshore wind with more than 10 years of experience in engineering and supporting floating offshore wind projects from conception to installation.
According to a statement by BW Offshore, Ideol has more than 60 employees, of which 90% are engineers covering the disciplines required for floating offshore wind technology and project development. Also, Ideol has installed two full-scale demonstration wind turbines based on its patented floater design and is currently building up a pipeline of projects as a co-developer in Japan, Europe, and the US.
Marco Beenen, the CEO of BW Offshore said: "We see solid opportunities for developing offshore power production solutions to drive energy transition at global scale. We are combining our four decades of offshore development, financing, and operational experience with Ideol's proven floating offshore wind technology and expertise. Together we are creating a champion in this emerging market with significant long-term growth and value creation potential."
"Our established position in floater design and engineering, coupled with BW Offshore's track-record of project development and deep-water expertise, provides a strong platform for accelerated growth as a leader in floating offshore wind technology and growing developer of offshore renewable energy projects," said Paul Dupin de la Guérivière, the CEO of Ideol.
Ideol will become a wholly-owned subsidiary of a new entity named BW Ideol, with a strategic target to grow as a technology and EPC services provider, expanding and maturing a significant portfolio of development projects and becoming a long-term asset owner and operator.
BW Offshore will invest 60 million euros to get hold of a strategic stake in BW Ideol. BW Ideol is planning to seek admission to trading on Euronext Growth Oslo by the end of March 2021.
BW Offshore expects to hold approximately 50% of the shares outstanding in BW Ideol post the contemplated capital raise and listing. The share acquisition and participation in the capital raise will be funded from BW Offshore's existing liquidity reserves. Ideol management and employees are expected to own about 20% of the shares post listing.
The transaction and listing are expected to close in the first quarter of 2021, subject to customary closing conditions and regulatory approvals.
The floating offshore wind industry - with only around 100MW currently installed worldwide - is still tiny compared to the installed capacity of the conventional, fixed bottom offshore wind industry (29GW at 2019 end). However, the floating wind is showing promise and is expected to take off significantly by the end of the decade.
While the current installed capacity is small and focused on pilot projects, the potential is there for the floating wind farms to reach and, theoretically, even surpass the installed capacity of the traditional offshore wind turbines, and not by a little, given that there are no water depth limitations for installation.
According to World Energy Reports, the floating wind installed capacity will reach between 8 to 10 GW by the end of this decade, and next decade WER expects to see more than 60GW of floating wind farms commissioned.
Worth noting, Spanish renewables company Iberdrola said Tuesday it planned to spend more than 1 billion euros ($1.2 billion) on an industrial-scale floating wind power farm off the Spanish coast if it secures help from a fund that seeks to lift Europe out of a coronavirus recession.
Iberdrola said it could start designing a 300 megawatt (MW) project this year - so about 3x the size of the current global installed capacity - that would generate 2,800 jobs a year until it starts operating in 2026.
Also worth noting, SBM Offshore and MODEC, BW Offshore's competitors in the FPSO space, are both getting involved in the floating wind game as well.
SBM Offshore last November said it had started work on a pilot floating offshore wind project in France, while MODEC said last October it was working with partners to develop a solution that will reduce the overall cost of floating offshore wind turbines.