UAE invests in UK wind farm market

The United Arab Emirates purchased a 49% stake in a major British wind farm, even though increasing costs have raised concerns about the industry’s future.
Masdar, the company owned by the Gulf State and presided over by the Cop28 president, has purchased a minority stake from Spanish developer Iberdrola in the East Anglia Three off-shore wind farm.

This is the second time in a few weeks that the UAE has struck a similar deal. Masdar, a company supported by the state of Abu Dhabi, recently acquired a 49% stake in the Dogger Bank South Project in the North Sea, which is worth £11 billion.The German-owned RWE is responsible for the construction of that project.

The financial disaster of many UK projects has boosted the sales of UK wind farms.

In deals struck a few decades ago, companies accepted so-called “strike prices” of less than £40 for each megawatt hour (MWh). The Government pays the maximum amount for power production, which is the strike price.

Iberdrola is the largest utility company in Europe, and also one of the top two utilities in the world. It has agreed to a strike-price of £37.35 in the early part of 2022 for East Anglia Three.

Since then, however, the industry has been affected by a rampant inflation which has driven costs up by over 40pc. The older prices were lower, but those who continued to pay them risked big losses.

The Government is now forced to offer new developers of wind farms a strike-price of £73. This shows the magnitude of financial challenges facing those who are locked into lower price deals.

Masdar’s investment confirms the growing overseas ownership in the UK’s renewable energy assets. The UAE company has been investing in renewable energy for over a decade. In 2007, it and partners launched the 630MW London Array off-shore wind farm. At the time, this was the largest offshore wind farm in the world.

Arlington Energy is a battery energy storage systems developer based in London that has over 170MW worth of assets.

Masdar’s 30MW Hywind offshore wind farm is the first ever floating offshore wind farm.

Masdar is headed by Dr Sultan Al-Jaber. He is the UAE Minister for Industry and Advanced Technology and is also the current chair of the Cop28 discussions in Dubai. Dr Al-Jabar also serves as the chairman of International Media Investments.

Masdar is owned by two Emirati oil firms – Abu Dhabi National Oil Company and Abu Dhabi National Energy Company. Both companies also operate oil platforms and gas fields in the North Sea.

Dr. Jaber said that companies like Masdar and Iberdrola, along with other renewable energy companies, are leading the way in the development of the renewable energy industry in Europe and around the world.
Ignacio Galan said, “By combining the renewables expertise and financial strength of Masdar with our own, we can deliver cleaner, more competitive, and more secure energy faster.”