Interview: Lorenzo Palombi on shifts at BayWa.r.e

Offshore wind in Europe remains highly competitive. Bidding in the ScotWind seabed leasing tender shows that much. The Crown Estate Scotland looked at 74 bids before it could announce the winners in 17 lease areas in January.

But the ScotWind results show there are opportunities in established offshore wind markets for firms that aren’t established offshore developers or cash-rich oil giants. One of these is German renewable energy firm BayWa r.e., which has won the right to develop a 960MW floating wind farm in its Floating Wind Allyance tie-up with BW Ideol and Elicio.

BayWa r.e. is not a new player in renewables: it has developed over 4GW of wind and solar since it was set up in 2009 by German conglomerate BayWa.

However, it only decided to move into offshore wind two years ago, and so winning a lease in the ScotWind tender is a major step towards realising its offshore ambitions.

A Word About Wind caught up with Lorenzo Palombi, global director of wind projects at BayWa r.e. Global, to talk about where offshore wind fits into the company’s plans; his views on floating wind; and pressures in key markets.

ScotWind ambition

For Palombi, the ScotWind win could hardly be better timed. He joined the company as managing director in 2013 and became its head of EMEA wind projects in 2019. In 2021, he also took over responsibility for global offshore wind operations and has moved up to his global wind role in January 2022.

“Having the ScotWind result in the very first month in the new role probably couldn’t have been any better,” he says.

Palombi says BayWa r.e. opted to focus on floating projects because it is a fast-growing part of the market and would complement its onshore wind and solar developments: “We wanted to embrace either a technology or market that is evolving… and we wanted to have a mix of participating in tenders but also going for greenfield development in countries where you can do so,” he says. Palombi explains that the firm is taking this approach so it can diversify its risk and find good opportunities.

This 960MW project is in zone 12 of the ScotWind tender, off the northeast coast of Scotland. But it is not the company’s only offshore wind project.

BayWa r.e. signed an agreement with South Korea’s Ulsan City in November 2021 to partner on the development of “several gigawatts” of floating wind projects off the city’s coast.

In Europe, it is also working on greenfield offshore wind developments in Ireland and Italy; and is a pre-qualified bidder in an offshore wind tender in Brittany, France, with a 250MW floating wind project with Elicio.

This focus on floating wind fits into a broader evolution for BayWa r.e. The company started life as a developer and was wholly owned by BayWa AG, but this changed in December 2020 when funds advised by Energy Infrastructure Partners bought 49% of BayWa r.e.

In 2021, BayWa r.e. also set up an independent power producer entity so that it can sell power and focus on holding its wind and solar assets long term.

“We certainly want to develop, but we also want to keep some ownership long-term. Some other projects we might eventually decide to scale down a little bit to have a smaller participation, or to exit them. We are focused on creating value,” he says.

Development challenges

But BayWa r.e. was not just the subject of a buyout in 2021. It bolstered its development pipeline by buying German developer NWind and French firm Enerpole. These deals added 700MW and 600MW respectively to its pipeline.

Palombi adds that the company is focused on growing in the Americas, Asia-Pacific and Africa too, but it does not want to become over-stretched: “We have expanded geographically but the priority is to do more in the countries where we are present, rather than add additional countries to our portfolio."

Europe currently represents 60% of its development pipeline, with 25% Asia-Pacific and 15% North America.

But there are challenges: “To me, the biggest constraint remains the permitting and the changes in local or regional policies. The pace of innovation is much faster than regional policy,” he explains. “Often the regional laws are not up to speed for the kind of pace that we need to have to achieve this transition.”