BP Alternative Energy formed

BP announced that it plans to double its investment in alternative and renewable energies to create a new low-carbon power business with the growth potential to deliver revenues of around $6 billion a year within the next decade.

Building on the success of BP Solar – which expects to hit revenues of $1 billion in 2008 – BP Alternative Energy will manage an investment program in solar, wind, hydrogen and combined-cycle-gas-turbine 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 of available energies for a world concerned about the environment, and we believe we can do so in a way that will yield robust returns,” said BP chief executive Lord Browne.

Browne said the first phase of investment would total some $1.8 billion over the next three years, spread in broadly equal proportions between solar, wind, hydrogen and CCGT power generation. Investment will be made step by step, and will depend on the nature of opportunities and their profitability.

Investment in solar over the next three years is planned to boost BP’s leading position as a leading manufacturer and supplier of photovoltaic systems. In a field where technology improvements and higher productivity are causing costs to decline, BP currently has 10 per cent of the global market which is growing at 30 per cent a year, faster than any other form of renewable energy.

BP currently has more than 100 megawatts of solar manufacturing capacity in the US, Spain, India and Australia, with a plan to double its capacity before the end of next year. BP recently signed a strategic joint venture to access China’s expanding solar market and provide local manufacturing capacity and is exploring similar opportunities elsewhere in the region.