BP Moves into Offshore Wind
BP plc (NYSE: BP, LON: BP) has announced that it is moving into offshore wind for the first time with a new strategic partnership with Equinor ASA (OSE: EQNR, NYSE: EQNR).
As part of the deal, BP will purchase a 50 percent stake in Equinor’s Empire Wind and Beacon Wind assets for $1.1 billion, with Equinor remaining as the operator. Subject to customary regulatory and other approvals, the transaction is expected to close early next year.
Empire Wind is located offshore New York City and has a total area of 80,000 acres. It is anticipated to have an installed capacity of two gigawatts (GW). Beacon Wind is situated offshore Massachusetts state and has a total area of 128,000 acres. This asset is expected to have an installed capacity of 2.4 GW.
BP’s move into offshore wind comes a month after the company announced a new strategy which includes an aim of increasing annual low carbon investment ten-fold to around $5 billion a year by 2030.
“This is an important early step in the delivery of our new strategy and pivot to truly becoming an integrated energy company,” BP’s chief executive officer (CEO), Bernard Looney, said in a company statement posted on BP’s website on Thursday.
“Offshore wind is growing at around 20 percent a year globally and recognized as being a core part of the world’s need to limit emissions,” he added in the statement.
“Equinor is a recognized sector leader and this partnership builds on a long history between our two companies. It will play a vital role in allowing us to deliver our aim of rapidly scaling up our renewable energy capacity, and in doing so help deliver the energy the world wants and needs,” Looney went on to say.
Commenting on the new partnership, Equinor’s CEO, Eldar Saetre, said, “we look forward to working with BP who share our strong ambition to grow in renewable energy”.
“Our partnership underlines both companies’ strong commitment to accelerate the energy transition and combining our strengths will enable us to grow a profitable offshore wind business together in the U.S.,” he added.
Offshore wind is a clean energy source which is forecasted to grow six-fold globally in the next ten years, according to BloombergNEF, BP highlighted. According to BP’s executive vice president for gas and low carbon energy, Dev Sanyal, the potential in the offshore wind market is huge.
In the statement posted on its website, BP noted that the U.S. is pioneering in the offshore wind space and looking to develop 30 GW by 2030. The company also highlighted that an American Wind Energy Association analysis found that developing 30 GW of offshore wind could support up to 83,000 jobs and deliver $25 billion annually in economic output by 2030.
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