bp reached an agreement on 1 June to purchase 9 GW of solar development projects in the US from independent US solar developer 7X Energy. The acquisition represents a significant step towards bp’s target of growing its net developed renewable generating capacity to 20 GW by 2025 and to 50 GW by 2030.
The deal will also grow the oil giant’s renewables pipeline from 14 GW to 23 GW. The assets will be developed through bp’s 50-50 solar joint venture Lightsource bp.
bp will pay 7X Energy $220 million for the projects and 1 GW of “safe harbour” equipment, and expects the acquisition to complete in 30 days. The projects are expected to meet bp’s low carbon investment criteria, generating returns of at least 8-10%.
Dev Sanyal, bp executive vice president of gas and low carbon energy, commented:
“With this purchase, we are continuing to put our strategy in action as we grow our renewables business in a deliberate and disciplined way. It brings us 9 GW of high-quality solar projects in markets where we can create integrated renewable energy offers through our trading and customer franchises."
Solar energy is the fastest growing power source in the US and is expected to quadruple over the next 10 years. It currently accounts for more than 40 % of all new electricity generating capacity added in the US.
The projects bp acquired projects are spread across 12 US states, with the largest portfolios in Texas (ERCOT) and the Midwest (PJM). Assets with a combined generating capacity of 2.2 GW are expected to reach final investment decision (FID) by 2025, with the remaining progressing by 2030.
bp is the USA’s largest energy investor, since 2005 investing more than $125 billion in the economy and supporting more than?125 000 additional jobs through its business activities.