Wind

Ikea-OX2 deal | Developer CEO sees 'some of world's largest wind farms' off Sweden by 2029

Paul Stormoen plans to expand consortium for 9GW of Swedish sea-based wind to include financial institutions, banks, and possibly pension funds

OX2 chief executive Paul Stormoen
OX2 chief executive Paul StormoenFoto: Christian Gustavsson/OX2
Some of the world’s largest offshore wind farms could be operating in Swedish waters by the end of the decade, OX2 chief executive Paul Stormoen told Recharge, after announcing a massive deal with the investment arm of Ikea parent Ingka Group.
The Nordic developer earlier Monday had said Ingka Investments will take a 49%-stake in three giant offshore wind projects in the Baltic Sea and Kattegat Strait (off western Sweden) that are slated to have a joint capacity of 9GW.

Among the projects is the Aurora wind farm between the Swedish islands of Gotland and Öland, which with a capacity of about 5.5GW potentially could rank as the world’s single largest offshore wind farm once completed.

By comparison, if all of Orsted’s Hornsea projects in the UK North Sea end up being built they would have a combined capacity of 7.5GW, but the largest individual projects, Hornsea 3 and 4, only have a capacity of 2.4GW and 2.6GW respectively.

“You have previously written about Aurora being the single largest development asset of offshore wind farm globally, these are very large and significant projects also on a global scale,” Stormoen said.

“I think we will be able to spearhead the offshore development in the Baltic Sea and Kattegat with these investments we are now taking together with Ingka [Ikea’s parent].”

The other gigascale projects of the Ikea deal are Galatea-Galene off the western Swedish province of Halland, and Triton off the southern province of Skåne. Together with Aurora, the projects 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.

The developer and Ingka are currently working towards getting the projects’ permitting finalised in 2024.

“Thereafter, there will be some engineering work to be done. So I would guess that we start construction around 2026,” Stormoen said.

“It is quite a short time-frame on these projects. And then we should be fully operational by 2029.”

The CEO reckons the consortium could take an investment decision shortly before construction starts in 2026, but added that there could be some variations on the exact timing for each of the projects: “It could go quicker, it could go somewhat slower.”

Sweden currently has only 192MW of operating offshore wind capacity as Stockholm so far hadn’t provided any dedicated support for offshore wind, which it is trying to correct now in the form of the free grid links.

OX2 in any case will have to work out its installation plans in synch with state-owned Swedish transmission system operator Svenska Kraftnät, which wants to provide up to 10GW of free offshore wind grid links starting in 2029 to speed up the build-out at sea in the Nordic country.

Aurora, Galatea-Galene and Triton “are all part of the Swedish TSO’s plan to build out the grid to the continental shelf. They are in areas able to connect to that first wave of grid built out,” Stormoen said.

“We will use [the free grid links], yes. That’s the plan and nothing else.”

Other developers – notably the ‘Freja’ joint venture between Aker Offshore Wind and Hexicon – have said they might build their own grid connections to make themselves independent of grid links at sea provided by the state, and thus be able to start construction faster.

Stormoen also revealed that more partners could join the consortia for the three gigascale Swedish offshore wind projects.

“Now we have Ingka as one of the kind of key long-term owners into that consortium. Before we start construction, that consortium will be expanded to include more both financial institutions and banks,” he said, adding that the entry of pension funds is also a possibility.

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Published 29 August 2022, 15:05Updated 29 August 2022, 15:22
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