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BP secured a $1.8 billion finance package for its Lightsource
joint venture to develop 25 GW-worth of solar projects globally by
2025, highlighting the attractiveness of corporate solar power
purchase agreements (PPAs).
The group of banks backing the combined credit and trade finance
facility favored the BP venture's plan to finance an unusually
large amount of solar power.
"If we're going to meet the commitments of the Paris Agreement,
business as usual isn't going to cut it," Nick Boyle, group chief
executive for Lightsource bp, said in a 20 September statement.
"This trend proves that renewables are mainstream and solar is
playing a key role in addressing the climate crisis," said
Boyle.
BP said it decided to invest in solar due to the rising demand
from corporate renewable energy consumers. This includes US
corporate behemoths like McDonald's, eBay, and Amazon, which signed a 250-MW PPA with a German
offshore wind farm in December.
PPA growth in Europe over the past three years has been driven
not only by corporations decarbonizing energy supplies while
hedging energy price risk, but also by governments removing
subsidies for renewable energy developers.
UK-based Lightsource bp, which was formed when BP took a stake
in Lightsource in 2017, so far has developed 3.8 GW of solar
projects towards the 25-GW target and plans to grow its activity
through greenfield facilities, co-development, and acquisitions
over the next four years.
The joint venture company is active as both a generator and
energy trader, operating in at least 13 countries, where it has
developed over 30 projects.
In Greece, it participated in May PV auctions in partnership
with Greek construction company Kiefer TEK, winning over 40% of the
350 MW awarded at the auction.
In Spain, Lightsource bp signed a deal with RIC Energy to
develop 1.06 GW of capacity at 14 PV sites across Spain and was
approaching off-takers for 10-year, European cross-border PPAs. A
Madrid-based company affiliated with Lightsource bp, Lightsource
Renewable Energy Spain Development, secured 5 MW in a January state
auction.
Also in Spain, Lightsource bp acquired an 845-MW solar pipeline
from Iberia Solar.
In Australia, BP is buying solar power from its joint venture to
supply its service stations with renewable energy.
BP expands in solar, offshore wind
BP counts part of Lightsource bp's pipeline towards its own
renewable generation target of 50 GW by 2050.
BP's renewables pipeline at the end of the second quarter stood
at just over 21 GW, up from 13.8 GW at the end of the first
quarter, according to its latest quarterly report. Most of the pipeline
(17.5 GW) is solar power, and 3.7 GW is offshore wind.
BP's renewable energy pursuits in the US include, for example,
its acquisition of 9 GW in US-based solar projects set to be gained from US solar developer
7X Energy following a deal in June.
Offshore wind is another growth area for BP. The company's
capital expenditure in the first quarter included $700
million to form an offshore wind joint venture with Equinor aiming
to develop four offshore wind projects in New York and
Massachusetts with 4.4 GW (2.2 GW net to bp) capacity.
Beyond these two renewable sectors, the major has also set
itself targets for the supply of both liquid bioenergy and EV
charging points.
BP is aiming to integrate renewables into its business to reach a Scope 3 emissions net-zero
target by 2050. That target includes cuts to "upstream oil and
gas production," except for its interest in Russian gas producer
Rosneft, making it one of few majors agreeing cut back on this
activity.
Posted 24 September 2021 by Cristina Brooks, Senior Journalist, Climate and Sustainability
