Topline

Chevron is the first U.S. oil major to invest in offshore wind power after signing a deal with Norway’s Moreld to help develop the turbine technology of tech firm Ocergy, while European oil giants Shell, Equinor and Total have already waded deeply into offshore wind projects.

Key Facts

Chevron Technology Ventures (CVT), the venture capital arm of Chevron, and Moreld Ocean Wind, a unit of Norwegian industrial firm Moreld AS, agreed to invest in the floating offshore wind turbine technology of Oakland, Calif.-based tech firm Ocergy Inc.

Having secured this funding, Ocergy said it will seek to compete for “gigawatt-scale” commercial energy projects around the world.

The terms of the investment were not disclosed.

But Chevron does not currently have plans to develop a large-scale wind power business.

Forbes has reached out to Chevron for further details.

Crucial Quote

“Offshore wind power is undergoing a period of rapid innovation in an effort to provide lower carbon energy at a substantial scale,” Barbara Burger, president of technology ventures at Chevron, said in a statement. “Ocergy has developed technology that could be part of the solution to enable more affordable, reliable, and ever-cleaner energy in a marine environment.”

Key Background

CVT’s deal with Ocergy is part of a $300 million plan unveiled earlier this year by Chevron to invest in low-carbon, clean energy technologies. Burger of CVT told Recharge News, a renewable energy publication, that Chevron knows offshore wind “will play a role in the future energy system. And we know we need to get the cost down. So, we are looking at breakthrough technologies that will change the game from where we are today.” But she cautioned that Chevron does not currently have a “defined aspiration for ourselves having a large-scale offshore wind business.” She added: “We see intersections between something like offshore wind potentially with green hydrogen [and the company’s core oil & gas business].”

Tangent

While Chevron is the first U.S. oil major to invest in offshore wind, a number of European oil giants, including Royal Dutch Shell, Total, BP and Equinor, have already done so. Shell, along with partners including Norway’s Equinor, plans to construct Dogger Bank, an offshore wind farm off the northeastern coast of England, which the company said will be the “world’s largest offshore wind farm” with combined power generation capacity of 2,400 megawatts. Earlier this year, Total of France signed an agreement to acquire an 80% stake in a floating wind project called “Erebus” located in the Celtic Sea off the coast of Wales. Equinor is widely involved in offshore wind projects – in January, the company and BP were selected by the state of New York to provide offshore wind power through two wind farms located in the Atlantic Ocean, south and east of Long Island, respectively.

Big Number

$87.5 billion. That’s how big the global offshore wind market is expected to be by the year 2026 – up from $36.1 billion in 2019, according to consulting firm FNF Research. The offshore wind industry received a big boost in February when South Korea announced it will spend $43.2 billion to construct a massive offshore wind power plant by 2030, as part of the country’s plan to become carbon neutral by 2050, matching a similar climate target by the EU.

Further Reading

The Green Revolution Has Been Won, Says America’s New Wind Billionaire (Forbes)

Wind Power Isn’t To Blame For Texas’ Electricity Crisis (Forbes)

Global Wind Power Growth Must Triple To Achieve Net Zero (Forbes)