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Summary
- BP announces a formal entry into one of the world’s best offshore wind markets.
- The wind energy plant co-developed by BP and EnBW is expected to generate 3 GW of electricity.
Footsie listed oil & gas giant BP Plc (LON: BP.) seems to be optimising its assets portfolio to reduce carbon footprint by 2050. The company has been prompted by the government and environmental activists to cut down on its carbon emissions.
Also read: Oil Giant BP Posts Dismal Annual Performance; Q4 Numbers Improve
The energy company has joined forces with a German company for the development of UK offshore wind project. The company is expected to develop wind farms near the Irish sea. The company is diversifying its portfolio with green projects.
This would be the first real move by the energy giant to establish itself in the green zone. The oil major has joined hands with EnBW, a Germany-based utility company, by forging a 50:50 joint venture for the development of the wind farm project. The wind energy plant co-developed by BP and EnBW is expected to generate 3 gigawatts (GW) of electricity, which is enough to light 3.4 million homes with clean electricity.
The project site located near the Irish Sea would be leased for a period of 60 years to the preferred bidders, BP and EnBW. This is the first time in a decade that the sites are being awarded on lease for power generation in the UK. The project sites are advantageous for the companies as the site usually witness good wind speeds as they are close to the Irish Sea.
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The project
The wind farm project is likely go live in a time span of almost seven years. Both the sites are located off the coast of northwest England and North Wales, next to each other. Their development would be cheaper in terms of operational costs and energy transmission as a lot of infrastructure would be shared among them. The ROI (Return on Investment) for the wind project is around 8-10 per cent, according to BP and EnBW.
The leasing of sites for setting up green energy infrastructure was on the priority list of the British government as it hoped for sustainable development and green industrial development. The government expects 40GW of electricity from the offshore wind project by 2030, 10 times from its planned initial capacity. BP has started to shift away from fossil fuels towards renewables for a sustainable future.
BP is undergoing a transformation to become a lower carbon-emitting company. Notable, the FTSE 100-listed oil giant recorded a $18-billion loss in 2020. Shares of BP rose by 2.8 per cent to GBX 260.55 at 15:07 PM GMT+1 on 8 February.
