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Shell has agreed to sell a majority stake in one of South Korea’s largest projects, becoming the latest major company to pull back from previous investment plans in offshore wind development. Shell, which will invest in the project in 2021, at the time saw offshore wind energy as an important part of its net-zero energy system, but has recently prioritized wind investments in favor of other parts of its business. He said he had sold it.
Under the agreement announced today, Shell will sell an 80% stake in South Korea’s Mumbaram project and partner with Hexicon, a Sweden-based early stage floating wind project developer. Hexicon reports that the acquisition was made possible with the support of his Glennmont Partners, one of Europe’s largest infrastructure funds focused on clean energy. The company will take advantage of the financing facility and Glenmont will initially pay Shell $5 million to acquire 100% ownership of the Mumbaram joint venture. The deal also provides Shell with up to $50 million in profit sharing over three years.
“South Korea remains a key market with favorable conditions for the development of floating offshore wind. Through this transaction, South Korea remains a core market for Hexicon, the world’s leading developer of floating offshore wind. This strengthens our position as a leading company,” said Marcus Soh, CEO of Hexicon.
Hexicon has been working on this project since 2018 and began measurements and data collection at the project location in August 2020. The joint venture with Shell was launched in September 2021, when the project was still in the feasibility assessment stage. At the time, Shell cited its long history in South Korea, the strong potential of wind energy, and the company’s expansion into floating wind power.
“Korea’s capabilities in offshore facility manufacturing and shipbuilding could play a vital role in the development and manufacturing of floating offshore wind power infrastructure, not only for Korea but also for the region and beyond,” Shell said. said Joe Nye, General Manager, Offshore Wind Asia. Announcing partnerships for 2021.
The Mumbaram project is scheduled to generate approximately 1.125 million kW of electricity from a wind farm located off the coast of Ulsan in southeastern South Korea. In 2022, they proposed 84 wind turbines, designating Vestas and its 15 MW turbine as the preferred supplier for the project. For locations 40 to 50 miles from the coast, the terrain requires floating wind turbines. Hexicon has patented a floating wind design for foundations that utilizes his two turbines on one platform.
The company is making good progress in South Korea, including acquiring the electricity license necessary to develop wind power plants. We have also signed interim offtake agreements for industrial users. Ulsan is one of South Korea’s industrial hubs.
Hexicon reports that South Korea will account for approximately 15% of its net portfolio in megawatt terms.
Shell says it has more than 2GW of offshore wind power in operation. The company had reported a pipeline and potential of over 9GW. Shell continues to maintain its position in wind energy in Norway and the UK, but has also withdrawn from projects including two wind farms in Ireland planned for September 2022. After acquiring French floating wind power specialist Eorfi in 2019, Shell is reportedly preparing to sell the company in May 2023 after Wael Sawant takes over as CEO. He said he will focus on creating greater value for the company.
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