bp, JERA Form Wind Energy JV

 

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 total 13 GW potential net generating capacity. Formation of JERA Nex bp 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 US$5.8 billion.

The companies will contribute interests comprising operating assets with around 1GW net generating capacity, a pipeline of development projects with around 7.5 GW capacity, and further secured leases with around 4.5GW of potential capacity. Initially the JV 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.

“We are very pleased to have reached agreement with JERA to form a top five wind developer globally,” said Murray Auchincloss, chief executive officer (CEO) of bp. “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.”

“Offshore wind has significant potential and is a critical component of the energy transition,” said Yukio Kani, CEO of JERA. “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, realize the potential of offshore wind globally, while positioning this business for long term success. 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.”

“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,” said William Lin, bp executive vice president for gas & low carbon energy. “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. We look forward to expanding our partnership with JERA through this exciting opportunity.”

Funding Framework

The two partners have aligned expectations for the business and have agreed a clear funding framework for the rest of this decade. The framework includes leveraging asset revenues and accessing competitive financing, 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.

JERA Nex bp is expected to benefit from the existing relationships and partnerships of JERA and bp, 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.

Longstanding Partners Combining In Offshore Wind 

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 liquefied natural gas 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. It owns and operates wind farms in Belgium, Germany, Japan, and Taiwan and has a development portfolio that includes projects in Japan, Ireland, and Australia.

Bp has been building a portfolio in offshore wind since 2019, and now has a development pipeline with total potential generating capacity of 9.7 GW net (5.7 GW development projects and a further 4GW secured leases). Development projects are the Morgan and Mona projects in the UK Irish Sea, and Oceanbeat East and Oceanbeat West in Germany’s North Sea, with secured leases off Scotland and the east coast of the US.

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.

The parties have agreed to work to complete formation of JERA Nex bp, subject to regulatory and other approvals, with completion expected by end of the third quarter of 2025.