Power Engineering - BP creates BP Alternative Energy

29 November 2005 - BP on Monday said it would double its investment in alternative and renewable energy to create a new low-carbon power business with the growth potential to deliver revenues of around $6bn a year within the next decade.

Lord John Browne, BP's chief executive aid, "Consistant with our strategy, we are determined to add to the choice of available energies for a world concerned about the environment and believe we can do so in a way that will yield robust returns."

BP plans to invest $8bn over 10 years in solar power, wind, hydrogen and combined cycle gas turbines (CCGT) power generation. The first phase of investment will total $1.8bn over three years, expected to be evenly split between the four sectors.

The company will hire about 500 people for a new business unit, BP Alternative Energy to be based in Sunbury, Middlesex. The new business will focus on ways to generate electricity that limit the release of carbon into the atmosphere.

"We see a growth business with growing revenues and growing profits," said Lord Browne. "Our aim is to become the leading player in alternative energy in the power sector on a global basis, and to grow the business five- or 10-fold over the next ten years."

Tony Juniper, director of the environmental pressure group Friends of the Earth, called BP's move "a step in the right direction" but said that companies needed to go "much further, much faster if we are to avoid the worst effects of climate change".

BP's investment in alternative energy forms stands at between $150m and $200m a year. The company has a long-established business selling solar energy panels, which made a profit for the first time last year. BP Solar is on track to hit $1bn in revenues by 2008, the company said.

BP's solar panels produce more than 100 MW of power in the US, Spain, India and Australia. It plans to double that amount by the end of next year.

BP is a relatively small player in wind power - it has two wind farms in the Netherlands and plans to build another in Britain. The company plans to build wind farms on its land, mainly in the US, which it said could accommodate enough wind turbines to generate up to 2000 MW of electricity.

BP plans to invest in a hydrogen project in Peterhead in Scotland that will be the world's first commercial venture of its kind. The project will turn natural gas into hydrogen with the resultant carbon dioxide being stripped out and pumped into depleted oil reservoirs. The sequestration project will result in hydrogen to fuel a 350 MW 'clean' power generation facility. A similar sequestration project to make hydrogen from low-value coke by-products at a US refinery, which would be used to generate 500 MW at an adjacent new power plant, is planned.

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