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Renewable Energy M&A: Japanese utility TEPCO enters UK offshore wind market by acquiring Flotation Energy and its 12 GW pipeline

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Tokyo Electric Power Company (TEPCO) is acquiring 100% of Scotland-based Flotation Energy's issued shares through their subsidiary, TEPCO Renewable Power. The deal marks TEPCO's first major venture into offshore wind markets in the UK and overseas. Flotation Energy currently holds a stake in two offshore wind projects in the UK - the 480 MW Morecambe offshore wind farm, awarded as part of the country’s recent Leasing Round 4, as well as the 100 MW White Cross wind test and demonstration project, also awarded by the Crown Estate. The company has a 12 GW pipeline of commercial-scale, fixed-bottom and floating wind projects in the UK, Ireland, Taiwan, Japan and Australia, and plans to expand into many more key markets.

For TEPCO, the acquisition represents a major move to diversify its renewable energy generation portfolio beyond Japan, and expand its offshore wind business to key growth markets across the world. The company plans to develop a total of 6-7 GW of new renewable power by 2030, primarily through overseas hydroelectric, as well as overseas and domestic offshore wind projects, which will become its main businesses in future. 

As per Enerdatics’ research, transactions for offshore wind generation assets have recorded the highest year-on-year growth since 2017, so far in 2022. Asset farm-downs, corporate takeovers and strategic partnerships have cumulatively grown by more than 40% this year, globally, driven by a surge in investor interest in Germany, South Korea, Spain, Japan, Taiwan and Australia. 2022 has also seen some of the largest offshore wind deals announced since 2017, as veteran power producers and private equity firms race to acquire large pipelines of under-development assets to capitalize on the significant declines in installation costs. Mubadala’s acquisition of wpd’s offshore wind unit and its 32 GW+ pipeline of assets, announced last month, marks the largest deal in the space till date. Ontario Teachers’ Pension Plan Board’s entry into Green Investment Group-backed Corio Generation’s 10 GW pipeline is another major deal announced this year.

The above analysis is proprietary to Enerdatics’ energy analytics team, based on the current understanding of the available data. The information is subject to change and should not be taken to constitute professional advice or a recommendation.

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