FRANKFURT (Reuters) - Wpd, owner of Germany’s second-largest pipeline of renewable energy projects, says its manageable scale and decades of experience make it well-placed to fend off looming competition from oil majors entering the sector.
Facing pressure from shareholders worried about the climate impact of fossil fuel and from a fall in oil and gas markets linked to the COVID-19 pandemic, oil majors including BP BP.L and Shell RDSa.L are seeking to accelerate a portfolio shift towards greener fuels.
Hartmut Broesamle, wpd’s chief operating officer, said that is easier said than done.
“Onshore wind is a small-scale and labour-intensive business,” he told Reuters, adding that such operations would be more challenging for larger corporations.
“You need people on the ground who believe in the cause or experts with a lot of experience in the area of wildlife conservation,” he said, adding that it took decades to build these teams.
Founded in 1996, wpd has grown its pipeline of onshore, offshore and solar projects to 19.85 gigawatts, making it Germany's second-biggest behind that of RWE RWEG.DE.
The group, which is co-owned by its two founders, is active in 25 countries, with France, Germany, Sweden and Taiwan among its largest markets.
“The oil majors’ market entry is driving the sector. I’m happy about every additional euro that flows into renewables and not into developing new oilfields,” Broesamle said.
He said investor interest was higher than usual at the moment, adding that it was coming from established players such as pension funds, insurers and municipal utilities.
Wpd runs and owns most of its projects, with the exception of offshore wind, where co-investors are needed for expenditure of usually more than 1 billion euros ($1.18 billion) per farm.
The company, which financial sources say is worth 4-5 billion euros, is selling assets in Canada, Finland and Sweden to fund growth, Broesamle said, adding that the U.S. offshore market was not attractive because of very high prices for wind territory.
A spokesman for the company declined to comment on the valuation estimate.
($1 = 0.8496 euros)
Editing by Barbara Lewis and David Goodman
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