Octopus Energy Group’s generation business has worked with Nest to take a stake in the Hornsea One Wind Farm, one of the world’s largest operational offshore wind farms.
The energy giant’s fund management team invested £200m in Hornsea One on behalf of Nest, one of the UK’s largest pension schemes, representing a third of the UK workforce. Through a joint venture with GLIL Infrastructure, which is also investing £200m, the deal represents the acquisition of a 12.5% stake from Global Infrastructure Partners for a total of £400m.
Based off the Yorkshire coast, the 1.2 GW Hornsea One wind farm , which is operated by Ørsted, is harnessing the UK’s wind resources to generate green power for over a million homes, through 174 wind turbines measuring 190m tall. Energy supplier Octopus entered the offshore wind sector recently and this deal marks its third, with more in the pipeline.
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It follows investments in Lincs Offshore Wind Farm in England on behalf of Octopus Renewables Infrastructure Trust (ORIT), the Borssele V Offshore Wind Farm in the Netherlands, and in floating offshore wind developer Simply Blue. Octopus and Nest have worked together since last year when Nest appointed the business to help it invest billions in green energy on behalf of Nest’s 11 million pension savers.
Zoisa North-Bond, CEO of Octopus Energy Generation, said: “The UK is already a world leader in offshore wind but there is still so much more we can do. Harnessing the UK’s strong wind resources out at sea will help provide energy security and bring down energy bills. We’ve already made a splash in offshore wind after only entering this renewable technology earlier this year, and we have lots more coming up.”
Alex Brierley, co-head of Octopus Energy Generation’s fund management team, said: “This latest deal is testament to the growing demand we’re seeing from institutional investors to invest in renewable energy. It’s brilliant to be expanding our relationship with Nest and starting a new one with GLIL to help pension savers’ money make a truly positive impact on people and the planet. The more we collectively invest in renewable energy, the faster we can shift to a greener, cleaner future.”
Stephen O’Neill, Nest’s head of private markets, said: “Renewable energy sources have huge potential for long-term investors like Nest. Its desirability should only increase in the coming years and as the UK accelerates towards net-zero, we’re confident Hornsea One will deliver inflation beating returns and grow the money our members have invested. I’d like to thank Octopus Energy Generation and GLIL for helping us access this deal. It’s a fantastic opportunity and exactly the type of investment we want to be involved in.”
Daniel Hobson, investment director at GLIL Infrastructure and head of real assets at Greater Manchester Pension Fund, said: “Offshore wind capacity plays a major role in the generation of renewable energy, so the potential of what is being developed here is vast.
“Our investment will not only support the UK’s energy transition and net-zero ambitions, and continue our track record in the renewable energy sector, it will also generate sustainable long-term returns for millions of pension fund members. We’re now looking forward to working with Octopus Energy Generation on this joint venture and the team at Ørsted.”
