BP Plc's Big Push On The Green Energy Initiative

  • Jan 07, 2020 GMT
  • Team Kalkine
BP Plc's Big Push On The Green Energy Initiative

BP Plc the second-largest oil and gas service company of the United Kingdom has set out to raise five energy companies each worth $1 billion by 2025 which would develop on the new and more energy-efficient technologies while cutting on carbon emissions. The initiative known by the term Launchpad will run parallel to the company's venture capital unit, which also funds ventures with disruptive technologies that work on the renewable energy and energy efficiency platforms. The difference between the two being, that the venture capital unit only provides seed capital while taking in a minority stake in the new companies while under the Launchpad platform BP will own a majority stake in these five companies and will hand-hold and nurture them till they become $1billion turnover companies.

Over the past few years, the idea of renewable energy and energy efficiency has got an enhanced impetus from every corner of society. Many Governments, large corporations as well as several not for profit organisations have launched major initiatives to fund and develop technologies which would bring about a new era in energy usage and efficiency. Flush with this new flow of funds, several new technologies have been able to work their way forward and have proved themselves as sustainable and worthy of being successors to the previous generation high carbon-emitting technologies, with several of them already seeing large scale implementation in many countries. Yet, there are still many promising ideas out there which have the potential to bring about transformational changes in the world energy landscape and need to be developed and nurtured to achieve their full potential.

The need to fund and finance these new green energy initiatives came about because of three critical factors that are becoming difficult to ignore as we progress towards the new age of human evolution. First, two of the major energy resources that we use today are the nonrenewable types, which is coal and crude oil with several estimates claiming the total discovered reserved of these commodities in the world will run out within few decades if we continue with the current level of consumption. Second, is the increasing costs of these resources, as the supply of these commodities continues to shrink so are their prices continuing to move in the northward direction. Over a period of time, the total money outflow into these energy commodities have started to take the lion's share of any country’s budgets, making these increasingly expensive. Lastly, the carbon dioxide emissions from the increasing use of these energy commodities are making the planet hotter, less breathable and inhospitable for its inhabitants. In a nutshell, we have reached a critical point when it has become unsustainable for the human race to continue with its evolutionary cycle with the current state of craft as far as energy technologies are concerned.

The new initiative being taken, not only are trying to bring down the cost and increase the availability of energy resources but are also trying to address many of the geopolitical issues with these initiatives. Energy resources, being critical to the economic development of any country, the concentration of these resources in a particular geography in the world, often give its domiciled countries significant political and strategic equity over geographies who are dependent on the import of these resources. Hence, most countries now realize that development of local energy resources is critical for the long-term economic development of a country. Secondly, there are a number of other renewable resources which have not been effectively utilized in the past millennia, due to the current state of technology then, but can now, with the current state of technology, become effective, efficient and sustainable sources of power. A transition, thus, to these sources of energy is not only desirable but is increasingly becoming critical for the progression of the human race. Finally, human beings need to evolve and find better ways of doing things than we are doing right now; our per capita consumption of energy and carbon emissions have surpassed the critical stage so much so that they have started to threaten life itself. Our next stage of evolutionary transition is not possible if we do not change the way we make use of our energy resources.

BP Plc Launchpad initiative, however, has been initiated keeping in mind the scale aspect of these new energy businesses. BP believes that many of these new energy businesses could do wonders in the world if they get the required scale to expand and make themselves more profitable. Many of the experts in the field also believe that this is a far better method of bringing about large-scale changes in the world energy landscape compared to investing in solar energy farms and wind energy farms. They hypothesize that there is greater chance for more such path-breaking technologies to bring about wholistic changes in the world energy space while still being more profitable than solar energy and wind energy businesses.

On the scene, however, a number of suitors have emerged who would fit into the description of the kind of businesses that BP Launchpad platform is looking for to invest and expand further. For one there is a company called Lytt and second, there is a company called Stryde, both of which work in the field of subsurface analytics and helps existing Oil and gas exploration companies increase productivity from their existing fields.

Launchpad is looking for wider applications of these technologies in order to consider them as potential candidates to take over. Other than that, there are also companies in the wind energy predictive analytics field and in the field of carbon management and offsetting, which BP intends to promote in the near future.

Such initiatives as the BP Launchpad, have been initiated by a number of leading companies in the world in the recent past, giving opportunities to a number of ideas which promise to bring about revolutionary changes to the way we live and the world functions.

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