Wind

Ikea owner plans to 'invest in more global offshore wind' after huge Sweden deal with OX2

Ingka Investments renewables head Frederik de Jong also tells Recharge furniture retail giant’s parent believes in subsidy-free projects

Frederik de Jong, Head of Renewable Energy at Ingka Investments
Frederik de Jong, Head of Renewable Energy at Ingka InvestmentsFoto: Ingka Group
The investment arm of Ikea owner Ingka Group plans to spend more money in wind at sea globally, its renewable energy head Frederik de Jong told Recharge after the company earlier this week closed a deal to buy nearly half of a 9GW offshore wind pipeline in Sweden from developer OX2.
Although the three Swedish projects in the Baltic Sea and Kattegat Strait (off western Sweden) are still in early stages of development, OX2 chief executive Paul Stormoen had said the gigascale wind farms - which would be among the world's largest - could be operating at the end of the decade. They could meet about a quarter of the Nordic country’s power needs.

De Jong declined to tell where Ingka Investments could take further stakes, but stressed the company’s investment strategy is linked to the ambition to reduce the climate footprint.

“We see ourselves investing in more offshore wind, because we believe that offshore wind and solar will be main contributors to create more renewable energy in the grid,” de Jong said in an interview.

“We are a global company. So we look at global offshore.”

Ingka Investment certainly has the war chest to fund even very large projects. After spending more than €3bn ($3bn) to make its global furniture retail business greener, the company plans to spend another about €3.5bn in renewable energies.

“We have a lot more investment decisions to take, and we will continue to diversify,” de Jong said.

The Swedish projects won’t come cheaply, as the Nordic country only will provide (mostly) free offshore grid links to some 10GW of projects starting in 2029, but has said it won’t grant any more direct support to sea-based wind as most other countries do.

Ingka is comfortable with subsidy-free projects, though, de Jong stressed.

“We have done many firsts with OX2. And one of the firsts that we did was a project in Finland to construct onshore wind without subsidy,” he explained.

“So, for us, subsidy-free projects are something we are used to and which we believe also is how it should work.”

Boosting its offshore wind footprint is also instrumental for greening Ikea’s supply chain, de Jong said.

After having secured renewable power capacity for its own operations so far, the company towards 2030 strives to “secure access to renewable energy for our supply chain going forward, such as we can help our ambitions or reducing our climate footprint.”

Ingka Investments through a supply license is already operating as a utility in Romania, where is supplies energy both to its own operations and to partners. The company plans to direct part of the 15TWh it targets to produce globally per year into its value chain.

Operating independently from Russian energy imports seems another advantage of massive spending into offshore wind.

Asked, whether the Swedish offshore wind mega-projects will increase the country’s energy security given Russia’s recent curtailment of energy flows in the wake of the Ukraine war, de Jong said: “Any contribution to the energy mix will help energy independence and that applies throughout Europe, what we believe is very important, and one of the reasons why we invest in renewable energy.”

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Published 1 September 2022, 10:01Updated 1 September 2022, 10:07
EuropeSwedenIKEAOffshore windMarkets