28th Nov 2005 12:00
BP PLC28 November 2005 press release 28 November, 2005 BP FORMS BP ALTERNATIVE ENERGY BP today announced that it plans to double its investment in alternative andrenewable energies to create a new low-carbon power business with the growthpotential to deliver revenues of around $6 billion a year within the nextdecade. Building on the success of BP Solar - which expects to hit revenues of $1billion in 2008 - BP Alternative Energy will manage an investment programme insolar, wind, hydrogen and combined-cycle-gas-turbine (CCGT) power generation,which could amount to $8 billion over the next ten years. "Consistent with our strategy, we are determined to add to the choice ofavailable energies for a world concerned about the environment, and we believewe can do so in a way that will yield robust returns," said BP chief executiveLord Browne. "Our recent experience, particularly with solar, has given us the expertise andconfidence to develop new products and markets alongside our mainstreambusiness. We are now at a point where we have sufficient new technologies andsound commercial opportunities within our reach to build a significant andsustainable business in alternative and renewable energy." Browne said the first phase of investment would total some $1.8 billion over thenext three years, spread in broadly equal proportions between solar, wind,hydrogen and CCGT power generation. Investment will be made step by step, andwill depend on the nature of opportunities and their profitability. "We are focusing our investment in alternatives and renewables on powergeneration because it accounts for over 40 per cent of man-made greenhouse gasemissions, the biggest single source. It is also the area where technology canbe applied most cost-effectively to reduce emissions. "As the pricing of carbon develops through trading schemes and otherinitiatives, the market will grow rapidly as low-emission technologies displaceless clean forms of power generation." Investment in solar over the next three years is planned to boost BP's leadingposition as a leading manufacturer and supplier of photovoltaic systems. In afield where technology improvements and higher productivity are causing costs todecline, BP currently has 10 per cent of the global market which is growing at30 per cent a year, faster than any other form of renewable energy. BP currently has more than 100 megawatts of solar manufacturing capacity in theUS, Spain, India and Australia, with a plan to double its capacity before theend of next year. BP recently signed a strategic joint venture to access China'sexpanding solar market and provide local manufacturing capacity and is exploringsimilar opportunities elsewhere in the region. Investment in hydrogen fuels will include the world's first commercial project -at Peterhead, in Scotland - to turn natural gas into hydrogen by stripping outcarbon dioxide and pumping it into depleted oil reservoirs. The hydrogen will be used at a power station in Peterhead to generate 350megawatts of 'clean' electricity, and the carbon dioxide re-injected into theoffshore Miller field. BP is looking at a similar sequestration scheme to makehydrogen from low-value coke by-products at a US refinery which would be used togenerate 500 megawatts at an adjacent new-build power plant. Investment projected for wind represents a significant step up in this area ofpower generation for BP. The company currently runs two wind farms alongsideexisting oil plants in the Netherlands. It also owns industrial land in open,high-wind regions of the US, away from residential areas, providing thepossibility to build the first large-scale US wind farm generating up to 200megawatts in 2007. The company has identified enough US sites to accommodatewind turbines with a total capacity of 2,000 megawatts. Projected investment in CCGT will be spent mainly in the US where the companyalready has significant co-generation capacity and is currently finalising plansfor a new $400 million scheme at one of its major plants that will deliver 100megawatts of power to the plant, and 420 megawatts to the local electricitygrid. BP Alternative Energy will be based in Sunbury, Middlesex and initially employsome 2,500 people around the world. It will be headed by Steve Westwell,reporting to Vivienne Cox, chief executive of BP's Gas, Power & Renewablesdivision. - ENDS - This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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