Octopus Energy, Nest and GLIL join forces for Hornsea One investment

4C Offshore | Tom Russell
By: 03/08/2022 Octopus Energy

Octopus Energy Group’s generation business has worked with Nest to take a stake in the
Hornsea One Wind Farm, currently the world’s largest operational offshore wind farm.

Octopus Energy Generation’s fund management team invested £200m in Hornsea One on behalf of Nest, one of the UK’s largest pension schemes. Through a joint venture with GLIL Infrastructure, who are also investing £200m, together they’ve acquired a 12.5% stake from Global Infrastructure Partners for a total of £400m. GLIL is a £3.6bn fund investing in infrastructure on behalf of pension funds.

Developed by Ørsted, is the world’s largest offshore wind farm to date. It is located in the North Sea off the east coast of England. The site consists of 174 Siemens Gamesa Renewable Energy. SWT-7.0-154 turbines, spanning across an area of 407km2, all of which have been installed. The site was fully commissioned at the end of 2019 and is anticipated to power over one million homes in the UK. The project also benefits from an inflation-linked Contract for Difference (CfD) subsidy, with 13 years remaining.

Zoisa North-Bond, CEO of Octopus Energy Generation, comments: “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: “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: “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.”

The deal has been signed and completion is scheduled to take place by around October 2022.

Octopus entered the offshore wind sector recently and this deal marks its third, with more in the pipeline. 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.

For more information on offshore wind farms worldwide, click here.