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BP planning to double alternative energy funding BP Alternative Energy to manage $8B, 10-year investment in solar, wind, hydrogen, combined-cycle-gas-turbine power generation Petroleum News
BP said Nov. 28 that it plans to double its investment in alternative and renewable energies and create a new low-carbon power business with the growth potential to deliver revenues of some $6 billion a year within the decade.
BP said it will build on the success of BP Solar, which expects to hit revenues of $1 billion in 2008.
BP Alternative Energy will manage an investment program in solar, wind, hydrogen and combined-cycle-gas-turbine power generation which could amount to $8 billion over the next 10 years.
“Consistent with our strategy, we are determined to add to the choice of available energies for a world concerned about the environment, and we believe we can do so in a way that will yield robust returns,” BP chief executive John Browne said in a statement.
“Our recent experience, particularly with solar, has given us the expertise and confidence to develop new products and markets alongside our mainstream business. We are now at a point where we have sufficient new technologies and sound commercial opportunities within our reach to build a significant and sustainable business in alternative and renewable energy,” he said.
Browne said some $1.8 billion would be invested over the next three years, in roughly equal proportions between solar, wind, hydrogen and combined-cycle-gas-turbine power generation.
The company said BP Alternative Energy will manage an investment program in solar, wind, hydrogen and combined power generation, with step-by-step investment dependent on the nature of opportunities and profitability.
Browne said BP is focusing its “investment in alternatives and renewables on power generation because it accounts for over 40 percent of man-made greenhouse gas emissions, the biggest single source. It is also the area where technology can be applied most cost-effectively to reduce emissions.
“As the pricing of carbon develops through trading schemes and other initiatives, the market will grow rapidly as low-emission technologies displace less clean forms of power generation,” he said. Plant to turn natural gas into hydrogen BP said its investment in hydrogen fuels will include the world’s first commercial project — at Peterhead, in Scotland — to turn natural gas into hydrogen by stripping out carbon dioxide and pumping it into depleted oil reservoirs.
The hydrogen will be used at a power station to generate 350 megawatts of “clean” electricity while the CO2 will be re-injected into the offshore Miller field. BP said it is looking at a similar sequestration scheme to make hydrogen from low-value coke by-products at a U.S. refinery which would be used to generate 500 megawatts at an adjacent new-build power plant.
BP runs two wind farms alongside existing oil plants in the Netherlands and owns industrial land in open, high-wind regions of the United States, providing the possibility to build the first large-scale U.S. wind farm generating up to 200 megawatts in 2007. BP said it has identified enough U.S. sites to accommodate wind turbines with a total capacity of 2,000 megawatts.
Investment in combined-cycle-gas-turbine power generation will be mainly in the United States, where BP said it already has significant co-generation capacity and is currently finalizing plans for a new $400 million scheme at one of its major plants that will deliver 100 megawatts of power to the plant and 400 megawatts to the local electricity grid.
BP Alternative Energy will be based in Sunbury, Middlesex, and initially employ some 2,500 people around the world. It will be headed by Steve Westwell, reporting to Vivienne Cox, chief executive of BP’s Gas, Power & Renewables division.
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