Abu Dhabi's Masdar gearing up for deeper investments in offshore wind

Abu Dhabi renewable energy company Masdar is beefing up its in-house offshore wind expertise and investing in a series of major European projects as part of a strategy to take a more active role in offshore wind development.

Having been an early mover in the industry with an investment in the UK's 630-MW London Array project in 2008, Masdar is now partnering with global developers RWE AG and Iberdrola SA to build out gigawatts of new capacity in the UK and Germany, with its eyes also on the emerging US market.

"We are trying to shift Masdar from being a passive investor into an offshore wind developer," Husain Al Meer, the company's director of global offshore wind and the UK, said in an interview with S&P Global Commodity Insights.

Masdar brings with it more than just financial strength, Al Meer said, having built up 16 years of development and operating experience in the offshore wind industry.

The company can also lean on the capabilities of its heavyweight shareholders — Abu Dhabi National Oil Co., Mubadala Investment Co. PJSC and Abu Dhabi National Energy Co. PJSC — to "create the ecosystem" around a project.

"There is a value-add that we can bring and put on the table alongside just the deep pockets and the dry powder that we have," Al Meer said.

The strategy shift involves an "aggressive hiring program," the executive added, with its London-headquartered offshore wind team growing from one employee in 2021 to more than 20 today, excluding those deployed onto individual projects.

New joiners in the last two years include hires from industry heavyweights like Ørsted A/S, BP PLC and RWE, according to LinkedIn.

"We are expecting this number to be increased massively, reflecting on our ambition," Al Meer said, without disclosing specific hiring targets. Masdar aims to reach 100 GW of renewable energy capacity by 2030 from about 20 GW today.

Changing market dynamics

Masdar's offshore wind development ambitions accelerated in 2023 with the signing of three major deals in the UK and Germany.

It joined forces with Spain's Iberdrola to develop the 476-MW Baltic Eagle project in the German Baltic Sea and is exploring the development of the 1.4-GW East Anglia Three project off the UK's east coast. Both wind farms are under construction and expected online in 2024 and 2026, respectively.

The company also agreed with Germany's RWE to jointly develop the 3-GW Dogger Bank South project in the UK North Sea, which comes with an estimated capital expenditure of £11 billion. Construction of the site's two 1.5-GW projects, DBS East and DBS West, could start as early as 2025, with the wind farm expected online in phases starting 2029.

Al Meer said Masdar's investments in the three projects, especially the early-stage Dogger Bank South, are a sign of things to come in offshore wind. As projects get larger, investors will be brought in at a much earlier stage to reduce construction risks for developers.

"I think there's a change in the market dynamic and also the interest of [developers to bring in] partners early on, credible partners like Masdar who share the long-term view [and] have the ability also to invest and develop projects alongside them, rather than just selling the project at a later stage ... to a financial investor," Al Meer said.

In February, Denmark's Ørsted executives discussed potentially a similar plan for the 2.9-GW Hornsea 3 wind farm in the UK.

Eyes on US market

Masdar is looking for opportunities to further expand its offshore wind portfolio, with its tie-up with Iberdrola part of an estimated €15 billion partnership that will see the two companies evaluate opportunities in offshore wind and green hydrogen in markets like the UK, Germany and the US.

While the UK and Germany are offshore wind leaders, the US is still building its industry, with several large projects facing challenging economics in recent times.

Still, the US is "one of the key markets for us," Al Meer said.

If it were to make a push into US offshore wind, Masdar would not need to look too far for opportunities to invest. Existing partners Iberdrola, RWE and Equinor ASA — with whom Masdar jointly owns the Dudgeon project in the UK — are all developing large-scale projects in US waters.

"We are definitely looking forward to investing in the US," Al Meer said.

Already in the US, Masdar has a venture with EDF Renewables Inc. on a portfolio of onshore wind, solar and energy storage assets.