Wind

'Bold move' | Ikea buys into OX2 offshore wind giants that could furnish 25% of Sweden's power

Developer OX2 sells 49% stake in three sea-based projects off Nordic country with a combined capacity of 9GW

A IKEA store.
A IKEA store.Foto: Ingka Group

Developer OX2 is selling a 49% stake in three giant Swedish offshore wind projects to the investment arm of Ikea parent Ingka Group that have the potential to produce more than a quarter of the electricity produced in the Nordic country last year.

The projects – Galatea-Galene off the western Swedish province of Halland, Triton off southern Skåne province and Aurora between the Baltic Sea islands of Gotland and Öland – have a combined potential to churn out up to 38TWh per year.

OX2 revised the estimated joint capacity of the three mega-projects to up to 9GW, more than the 8.3GW the company had seen previously.

“This cooperation is a bold move in expanding our investment activities to address climate footprint reduction well beyond our own consumption and into our value chain,” said Peter van der Poel, managing director of Ingka Investments.

“We are increasing our global investments and commitments in renewable energy from over €3bn ($2.98bn) today to €6.5bn before 2030.”

The projects are under development, with the main wind farm permit applications submitted, OX2 said.
Sweden currently only has 192MW in operating offshore wind capacity (due the lack of a dedicated support mechanism for offshore wind), but a gigantic potential on its 3,200km coast on the Baltic Sea, Bay of Bothnia and the Kattegat / Skagerrak straits that link the Baltic and North Sea.
As the country is striving to decarbonise its industry, transport and heating – and become independent of Russian energy imports – the government has pledged to make permitting faster and also wants to provide up to 10GW of free offshore wind grid links to speed up the build-out at sea.

Developers such as OX2 also seek offtake deals or other types of cooperation with industry and large businesses directly to be able to secure financing and a market for gigascale projects.

“We have received great interest from the market to join us on the important mission of introducing large scale offshore wind production to the Swedish energy system,” OX2 chief executive Paul Stormoen said.

“I am happy and proud that we have now concluded the agreement with Ingka Investments and based on our history of having realised 10 wind and solar projects together, we are confident that this partnership will be successful.”

Ingka Investments has previously bought nine onshore wind farms and one solar farm from OX2.

Ingka Group owns 575 wind turbines in 17 countries, 20 solar parks, and 935,000 solar panels on the roofs of Ikea stores and warehouses. Together, the company’s renewable energy power totals more than 2.3GW, equivalent to the annual consumption of over 1.25 million European households.

OX2 will receive an initial payment of SKr610m ($57m) for the stakes. Following successful permitting of the projects, and if both parties agree to continue development, OX2 will receive another €100,000 ($99,950) per MW for the planned total capacity - or €441m, according to Recharge calculations, if the entire capacity were to be built. The transaction is expected to impact OX2’s operating income positively with SKr584m in the second half of 2022.

The transaction allows the developer to continue to ramp up its offshore activities, also as developments costs will be shared after its completion, which is subject to merger filing requirements and expected to be completed within two months.

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Published 29 August 2022, 08:34Updated 16 October 2023, 14:06
EuropeSwedenOffshore windOX2IKEA