Portuguese power firm EDP and French utility Engie announced a joint venture focused on achieving a ranking among the world’s top-five largest offshore wind developers.

The 50-50 venture, to be created following a memorandum of understanding inked by EDP’s chairman and CEO António Mexia and Engie’s CEO Isabelle Kocher, will channel all future offshore wind investments from Engie and EDP Renewables, according to a press statement

It will also be the future home of EDP and Engie’s existing offshore wind project pipelines, which encompass 1.5 gigawatts of capacity under construction and 4 gigawatts under development.

The as-yet-unnamed joint venture, which is subject to regulatory approval and should be operational by the end of the year, aims to have between 5 gigawatts and 7 gigawatts of projects under operation or being built by 2025. A further 5 gigawatts to 10 gigawatts should be “under advanced development” by then, Engie said.

The JV will put the companies into closer competition with Denmark's Ørsted, the leading global offshore wind developer.

Kocher said the move is fully aligned with Engie’s plans to move away from carbon-based fuels.

In March, the company sold Thai coal generation firm Glow Energy to Thailand’s Global Power Synergy Company while bidding for 750 megawatts of subsidy-free offshore wind being tendered by the Dutch government in the Hollandse Kust Zuid 3 and 4 development zones.

“The offshore wind sector is set to grow very significantly by 2030,” said Kocher in the press statement. “The creation of this joint venture will enable us to seize market opportunities while increasing our competitiveness on one of our key growth drivers, renewables.”

EDP’s subsidiary EDP Renewables, meanwhile, is already the world’s fourth-largest wind energy producer, with a presence in 14 markets. Mexia said the joint venture represents an important step in EDP’s renewables strategy, “allowing us to accelerate our path in offshore wind, one of the key growth markets in the next decade.”

EDP and Engie are already consortium partners in four fixed-foundation and two floating projects in Europe. The companies joined forces six years ago to bid for two French fixed-foundation projects that have yet to be built.

One of these, a 496-megawatt plant near the Yeu and Noirmoutier islands on the Atlantic coast of France, could go live in 2021 if government red tape does not slow it down. Another 496-megawatt project is expected to enter operation off Dieppe-Le Tréport in 2023.

First, though, EDP and Engie are hoping to commission the 950-megawatt Moray East plant in Scotland. A further Scottish project, the 750-megawatt Moray West plant, won the backing of Highland councilors last November.

Aside from these projects, the two companies are bidding for offshore wind capacity being tendered in Dunkirk, France, and are partners in the Portuguese WindFloat Atlantic and French Golfe du Lion floating projects, using semi-submersible platforms.

Eye on the U.S.

While the joint venture will continue to hunt for opportunities in Europe’s burgeoning offshore markets, Engie said it would also seek contracts in the U.S. and selected geographies in Asia.

Late last year EDP Renewables entered the U.S. offshore wind market, paying $135 million along with Shell New Energies for the right to develop a zone facing Massachusetts that could hold 1.6 gigawatts of future capacity. It was not immediately clear whether the U.S. zone will be part of EDP's new JV with Engie. 

While the U.S. offshore wind market has been slow to take off, with only one commercial project currently in operation, developers are angling to take advantage of the increasingly ambitious announcements from states along the Eastern Seaboard.

In January, for example, New York announced a target of 9 gigawatts of offshore wind to be procured by 2035. Last month the Bureau of Ocean Energy Management revealed California was adding to the East Coast market’s momentum, with 14 developers lining up to build floating wind farms.

Meanwhile, a number of Asian territories have also kick-started moves to develop offshore wind. Foremost among them is Taiwan, which last year put 3.8 gigawatts of capacity up for auction.

Although changes in regulation have stymied some of this potential, other Asian countries have begun to open up too. Japan and South Korea are wooing Western developers, and even the massive Chinese market is showing signs of admitting foreign offshore wind players. 

Like California, Japan and South Korea will likely require floating foundations for offshore wind. An Engie spokesperson said the company had opted to focus on fixed-foundation and floating offshore wind technologies, as they are “quite complementary.”

The press representative said: “Floating offshore wind technology will improve and become commercial in the near future.”

Beyond offshore wind, Engie has been on an acquisition spree in the U.S., ranging from onshore renewables developer Infinity to storage company Green Charge Networks. Last week it announced the acquisition of Genbright, a U.S. software startup aimed at delivering more revenue from distributed energy resources.