Daily Telegraph: BP pledges $8bn for solar power: “Shell yesterday said production was beginning on its Bonga deep water platform off Nigeria, following repeated delays and overruns.”: Tuesday 29 November 2005
By Christopher Hope, Industry Editor (Filed: 29/11/2005)
BP, the world's second biggest company, yesterday announced plans to invest $8billion (£4.6billion) over the next 10 years in non-carbon energies like solar and wind energy. BP said the new business could generate as much as $6billion a year in revenues by 2015.
The news comes on the eve of today's likely announcement of a Government energy review. Lord Browne of Madingley, BP's chief executive, said that the time for experimenting with these energies had stopped. The company was officially looking "beyond petroleum", he said.
BP is creating a new business called BP Alternative Energy, based in Sunbury, Middlesex and initially employing 2,000 people around the world. The business is planning to hire another 500 skilled scientists and engineers, including 100 in the UK, to staff the venture.
Lord Browne said BP had gained confidence after seeing how well BP's solar business had performed - that business will turn over $1billion a year from 2008.
"Our recent experience particularly with solar has given us the expertise and confidence to develop new products and markets alongside our mainstream business," he said.
"The technologies are maturing and there are increasing economies, so there are opportunities to make significant returns."
The $8billion investment over the next decade compares with the $1billion BP has ploughed into alternative energies over the past 10 years. BP was expecting to make a 15pc return on capital employed in the new business, he added.
However Lord Browne conceded that the average annual $900m investment in alternative energies was only a fraction of the $15billion that BP spends on oil and gas capital expenditure.
The new business ropes in BP's existing solar, wind and hydrogen and combined gas turbine operations. The first $1.8billion investment will be made over the next 18 months.
BP plans to build two new hydrogen plants, increasing capacity from 30 megaWatts to 450mW, and increase its wind energy output from 48 gigaWatts to 207gW over the next 15 years, including a large project on the Isle of Grain, Kent.
The company also wants to treble sales of its solar panels by investing in four plants in the US, Spain, India and Australia.
Lord Browne defended the company against charges that it was profiteering last week during the record rises in the wholesale gas price, suggesting other factors such as the "opaque" nature of European energy markets were to blame.
Turning to his own future at the company - he is due to retire when he is 60 in February 2008 - he said he was not thinking about other jobs just yet. "I am completely focused on BP - there is no vacancy," he said. BP's shares closed 16.5 at 644.5p.
• Shell yesterday said production was beginning on its Bonga deep water platform off Nigeria, following repeated delays and overruns. Bonga is likely to produce 225,000 barrels a day, about 10pc of Nigeria's total oil production. The start-up is Shell's biggest so far this year. Shell shares fell 24 to £19.03.
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