BP Sets Goal to Become One of The World’s Largest Renewable Power Generators

BP is aiming to include 50 gigawatts of renewable energy in their business before 2030. This energy includes the likes of solar, wind and hydropower. Their aim is to become one of the largest renewable power generators in the world.

It currently only has 2.5GW of renewable power in the UK. BP has a long way to go and will need to invest tens of billions of dollars over this decade. They even may have to accept that they will gain lower returns than what they would gain from oil. Oil firms are all under pressure from governments, investors, banks and especially climate activists to stop using their fossil fuels and move to a greener renewable energy approach to their energy.

In Becoming the Largest Renewable Power Generators…

Just the other week, BP followed in Eni’s (ENI.MI) footsteps by committing to cut their oil production over this decade. As well, they’re creating larger targets for reductions of fossil fuels. Scaling up will be somewhat difficult for BP and experts have said that offshore wind farms will be the fastest way to reach this target. However, wind farms take years to develop and are expensive to establish.

Furthermore, BP is already in debt of 41 billion dollars due to numerous investors changing their investments to greener energy firms. BPs’ shares have halved over the last couple of years. This has cut BP’s market value to just under 80 billion dollars.

Contrastingly…

The shares in Denmark-led Orsted, one of the largest offshore wind developers, has risen by 135%. Overall, its market value is 60 billion dollars! Orsted has 10GW of wind power capacity, a 5th of BP’s budget. Though it’s still four times more than BP have currently. Orsted is committed to adding an extra 3.8GW in the near future.

According to the International Renewable Energy Agency, the renewable capacity of the globe is approximately 2,500GW. This is predicted to grow monumentally due to countries seeking lower emissions. This is so they will meet their targets, addressed in the 2015 Paris Climate agreement.

Data from the IEA demonstrated that last year…

Wind, solar and hydropower accounted for a quarter of electricity created in the Organisation of Economic Co-operation and Development countries.

BP stated that they would slash oil and gas output by 40% by their 2030 goal. They will additionally spend 5 billion dollars each year on projects that are low carbon. It wants to be the world’s largest green power producers. Furthermore, it aims to sell oil and gas assets too.

BP CEO Bernard Looney recently stated in a conference that BP will only chase renewable capacity that comes with the right returns. They will not go after capacity for any old reason.

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