Big Oil Wins Big in U.K. Offshore Wind Auction

European oil majors BP (NYSE: BP) and Total (NYSE: TOT) won the rights to develop several offshore wind farms in the U.K. These moves mark the latest step in their transition away from fossil fuels toward renewable energy. 

BP teamed up with German utility EnBW on bids that won the rights to develop two leases. The 50-50 joint venture will make four annual payments of 231 million pounds sterling ($317.4 million) on each lease before the projects reach a final investment decision. The company expects the two projects to be operational in seven years. These leases have the combined potential of generating three gigawatts (GW) of renewable energy, enough to power 3.4 million U.K. households. Despite the hefty lease premium and the projects' development cost, BP anticipates that it can earn 8% to 10% returns -- at a minimum -- from these investments. 

Image source: Getty Images.

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Source Fool.com