BP has signed a deal worth up to £4.5bn to build offshore wind farms with Japan’s largest electricity generator as part of a transformation that will allow it to gain some access to zero-carbon wind energy while focusing on fossil fuels. Agreed.
The FTSE 100 company will form a 50:50 joint venture with Japanese power generation company Jera to combine offshore wind assets, the companies announced on Monday.
With renewables such as wind and solar expected to rapidly increase their share of global energy use, oil companies are under pressure to demonstrate plans to transition away from polluting fossil fuels. are.
The International Energy Agency said no new fossil fuel projects should be approved if the world is to meet its goals of curbing carbon pollution and global warming. But some shareholders are pushing in the opposite direction, encouraging oil companies to focus on their strongest area: profitable oil and gas production.
BP has faced intense criticism for watering down its carbon reduction targets and reversed plans to curb fossil fuel exploration and production under Murray Auchincloss’s government. He became permanent CEO in January after his predecessor, Bernard Rooney, abruptly resigned over an undisclosed sexual relationship with a co-worker.
In June, Auchincloss imposed a hiring freeze and halted new offshore wind projects in a move that Greenpeace UK described as “regrettable but sadly unsurprising”.
The joint venture with Jera will combine the Japanese company’s existing wind farms, which have a generating capacity of approximately gigawatts (GW), with projects being developed by both companies.
BP does not yet have any wind farms capable of generating electricity, but it is expected to generate up to 10GW, including two offshore projects in Germany and the UK. Other prospects include the U.S. Beacon project, which has fallen into trouble amid turmoil caused by soaring materials prices and project backlogs.
Mr Auchincloss said the joint venture would create “the world’s top five wind power developers” while limiting the amount demanded from shareholders. The joint venture will seek to raise its own funds, separate from BP’s balance sheet.
“This will be a very powerful vehicle for shareholders to grow into an electrifying world while maintaining a capital-light model,” Auchincloss said.
BP says it will invest up to $3.25 billion (about £2.6 billion) in committed joint venture projects by the end of 2030, while Jera says it will invest up to $2.55 billion and up to $5.8 billion. did. However, that amount could be lower if the joint venture finds alternative financing.
JERA itself was established by merging the fuel and thermal power divisions of TEPCO and Chubu Electric Power. The company’s investments in renewable energy are a relatively small portion of its overall business, which includes oil and gas production, transportation and trading, and coal-fired power plants.
