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BP reshapes its renewable energy strategy

Posted by | Rauf Mammadov

BP has embarked on a strategic realignment, reevaluating its renewable energy investments under new leadership, following in Shell’s footsteps. Former CEO Bernard Looney pursued ambitious growth in wind energy, hydrogen, EV charging, and biofuels as part of BP’s transformation into an integrated energy company. However, interim CEO Murray Auchincloss has adopted a more measured approach, focusing on streamlining operations. This shift is reflected in BP’s decision to sell its US onshore wind business and prioritize solar energy and EV charging, with an emphasis on profitability and sustainable growth1.

Scaling back wind energy investments

BP recently announced plans to sell its US onshore wind energy business, including stakes in 10 wind projects across seven US states with net generating capacity of 1.3 gigawatts. BP reports that these assets no longer align with its growth strategy and could deliver greater value under different ownership. This move reflects broader industry challenges that have led to delays and renegotiations in the offshore wind sector, such as rising material costs, higher interest rates, and supply chain issues.

Despite  scaling back its  onshore and offshore wind operations, BP remains committed to expanding its other renewable energy businesses, such as solar and EV charging. By fully acquiring Lightsource BP, Europe’s largest solar developer, the company is doubling down on solar energy. This acquisition enables BP to increase its investment in solar power, which offers greater scalability and profitability compared to wind. Solar has become more cost-competitive and can be deployed more rapidly, making it an ideal target for BP’s renewed growth strategy2.

Expanding EV charging infrastructure with LAZ Parking

Another key focus for BP is electric vehicle (EV) charging infrastructure. BP’s bp pulse recently partnered with LAZ Parking to develop ultra-fast public charging hubs in high-traffic locations across the US. These Level 3 chargers, rated at 250kW or higher, can fully charge an EV in 30-45 minutes. With LAZ managing over 1.6 million parking spaces across 42 states, the partnership gives BP access to prime locations for EV drivers. This initiative complements earlier partnerships, such as BP’s collaboration with Simon Property Group to expand charging stations at commercial properties, reinforcing BP’s commitment to expanding its EV infrastructure3.

Green Hydrogen: A new frontier

In addition to solar and EV charging, BP is also making significant investments in green hydrogen, a critical component of its decarbonization strategy. In collaboration with Iberdrola, BP is developing Spain’s largest green hydrogen plant at its Castellón refinery. This 50:50 joint venture will involve the construction of a 25 MW electrolyzer powered by renewable electricity, which will support the decarbonization of BP’s refining operations. Set to be operational by 2026, the project will produce 2,800 tons of green hydrogen annually. This highlights BP’s broader commitment to hydrogen, a crucial technology for decarbonizing industries such as refining and heavy transport4.

Conclusion

BP’s evolving renewable energy strategy reflects a balance between profitability and sustainability. The company’s decision to sell its U.S. onshore wind assets, focus on solar through Lightsource BP, expand its EV charging infrastructure, and invest in green hydrogen highlight a more focused approach under Auchincloss. As BP navigates the energy transition, it is aligning its investments with scalable assets that integrate more easily with its conventional operations, offering both near-term profitability, and long-term value.

References

  1. https://www.bp.com/en/global/corporate/news-and-insights/press-releases/bp-to-divest-operating-us-onshore-wind-business-as-it-focuses-onshore-renewables-in-lightsource-bp.html
  2. https://www.reuters.com/business/energy/bp-buy-remaining-50-solar-jv-lightsource-bp-2023-11-30/
  3. https://www.bp.com/en_us/united-states/home/news/features-and-highlights/bp-pulse-laz-parking-bringing-fast-ev-charging-hubs-to-20-cities.html
  4. https://www.bp.com/en/global/corporate/news-and-insights/press-releases/bp-and-iberdrola-announce-final-investment-decision-for-largest-green-hydrogen-plant-in-spain.html

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