The UK's National Wealth Fund and the Scottish National Investment Bank will also invest in the 100 MW floating wind project.
A major floating offshore wind project in Scotland has secured up to £150 million in backing from a group of investors including GB Energy.
The UK’s National Wealth Fund (NWF) and the Scottish National Investment Bank (SNIB) will also join GB Energy in backing the Pentland Floating Offshore Wind Farm.
Each investor has acquired an initial shareholding in the project, with the option to invest up to £50m.
The 100 MW project, located off the coast of Dounreay, has been in development since 2017.
Swedish firm Hexicon AB initially proposed a 10 MW floating wind demonstrator at the site in the Pentland Firth, however Dounreay Tri project collapsed.
Danish investor Copenhagen Infrastructure Partners, which owns a majority stake in Pentland developer Highland Wind Limited, later revived the plans in 2021.
The trio of investors joins Eurus Energy in backing Pentland after the Japanese firm took an undisclosed stake in the project last year.
The Pentland developers will use several innovative technologies in the project, which is aiming to accelerate the industrialisation of floating wind.
The project is expected to create more than 1,000 jobs throughout construction and operation.
Pentland Floating Offshore Wind
In a statement, the Pentland developers said the investment from publicly-owned GB Energy, NWF and SNIB “demonstrates how public finance institutions can work together to support early-stage technologies within the clean energy sector”.
The investment also “signals confidence in the UK’s floating offshore wind sector, encouraging engineering firms, especially in Scotland, to pivot from oil and gas and prepare to compete in a growing market”, Highland Wind said.
Pentland is among several floating wind projects in Scotland which are eligible to secure contracts for difference (CfDs) in the upcoming seventh allocation round (AR7).
CIP partner Nischal Agarwal said the Danish investor is “playing a full role” in helping to deliver the UK government’s 2030 clean power goals.
“Floating offshore wind" holds significant potential to innovate, reduce its technology costs, and establish a world leading UK supply chain capable of enabling scale-able low carbon power generation to meet future growth in electricity demand,” Agarwal said.
Alongside Pentland, CIP is also an investor in the Beatrice, Ossian and Morecambe offshore wind projects in the UK.
GB Energy chief executive Dan McGrail said the Pentland investment is “just the beginning” of the company’s investment strategy.
McGrail said the floating wind project will “help bring good, skilled jobs to the Scottish Highlands”.
“This sets out our aspiration to become the UK government’s energy developer,” he added.
“It also reflects [GB Energy’s] ambition, capability, and commitment to making the UK a clean energy superpower.”
Offshore wind investment ‘crucial’ to energy transition
NWF head of banking and investments Ian Brown said “increased and sustained investment in offshore wind is crucial to the clean energy transition and key to bolstering the UK’s energy security”.
“It is essential for the public and private sector to work together to achieve this,” Brown said.
“Our investment in the Pentland wind farm is a perfect example of that collaborative approach.
“Working with Great British Energy and the Bank, we are building on the more than £240m we have so far invested in offshore wind port and supply chain infrastructure to support CIP in the development of a key project which will help to deliver clean energy, high quality jobs and economic growth to the UK.”
SNIB chief investment officer Mark Munro said Scotland’s offshore wind potential is “considerable”.
“However, substantial investment is needed to capitalise on the opportunity and ensure it delivers transformational impact for our economy and our communities,” Munro said.
“The Bank has developed significant expertise in Scotland’s burgeoning offshore wind sector and has invested in all areas of the supply chain.
“Our commitment of up to £50m to support the Pentland Project is an important step toward developing a thriving and sustainable economy.”
Jobs and supply chain boost
UK Chancellor Rachel Reeves said the “initial investment” in Pentland will “help cement Scotland as a homegrown, clean energy powerhouse, powering tens of thousands of homes and supporting over a thousand good jobs”.
Meanwhile, UK energy minister Michael Shanks said GB Energy is “on a mission to take back control of our energy”.
“Floating offshore wind is a huge opportunity for the UK, and this first stake in a project by Great British Energy helps put us at the forefront of this cutting-edge technology,” Shanks said.
“We said GBE would build up supply chains, create jobs and drive investment to all parts of the UK – especially in Scotland and this investment shows our publicly owned energy champion is getting on with the job.”
SNP deputy First Minister Kate Forbes said the SNIB investment in Pentland means the bank can help to support the Scottish supply chain, enhance innovation, and boost job opportunities.
“We are leading the way in the floating wind sector but are ambitious to go further and take full advantage of the economic opportunities Scotland’s natural resources and technical expertise provide,” Forbes said.
“That is why we are investing up to £500 million over five years in the infrastructure and manufacturing facilities critical to growing the offshore wind sector, which is expected to leverage additional private investment of £1.5 billion.”