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Published on August 2nd, 2013 | by Joshua S Hill

5

BP Reverses Decision To Sell Wind Business

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Renewable energy will one day take its place as the primary energy generation technology in decades to come, of that there is very little doubt. The last decade has seen that renewable energy technology development as increased energy and cost efficiency, and the ever-dwindling fossil fuel and mineral resources are pushing countries and governments across the globe to look into alternative options.

The only obstacle in the way to this new paradigm is the existing energy generation sector entrenchment, made up of fossil fuel and mineral energy generation like coal, oil, and nuclear.

However, the past few years have seen an interesting shift in the focus of these multinational companies, albeit a small and reluctant step. In fact, the move is an expression of fundamental financial wisdom — diversification — though the companies are probably less than happy that they have been forced to diversify in a competing direction.

BP announced at the end of the July that they had scrapped plans to sell their wind energy division, though just why is currently a little up in the air. BP announced their intention to sell the US wind farm operation at the start of April, pledging to focus on its core oil and gas businesses. However, four months later BP has said that they will not be selling the division, saying apparently that the timing simply isn’t right.

According to Renewable Energy World, who spoke to Matt Hartwig, a spokesperson for BP America and its Alternative Energy business, in an e-mail exchange, BP “has determined that now is not the right time to sell the business.” However, Business Green have reported a different variation, saying that “BP has scrapped plans to sell a 2.6 GW portfolio of US wind power projects, after failing to secure a high enough offer.”

The sale was said to have been part of an attempt to accrue enough capital to cover the costs associated with the disastrous Deepwater Horizon oil spill of 2010. Business Green refer to “reports” suggesting that BP was unhappy with the offers they were receiving. A nameless spokesman is reported as confirming this particular line of reasoning according to a Reuters article, saying that “we didn’t find an offer that we thought was the right value.”

“Our feeling is that the business is more valuable to us than to others. We had a number of bids, but we decided now is not the right time to sell.”

The 2.6 GW portfolio of wind farms is spread across nine states — Texas, Indiana, Colorado, Kansas, California, South Dakota, Idaho, Hawaii, and Pennsylvania — as well as another approximate-2 GW worth of projects currently in development, which are “nearly shovel-ready” according to BP.

 





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About the Author

I'm a Christian, a nerd, a geek, and I believe that we're pretty quickly directing planet-Earth into hell in a handbasket! I also write for Fantasy Book Review (.co.uk), and can be found writing articles for a variety of other sites. Check me out at about.me for more.



  • wattleberry

    If you can’t beat ‘em…….

  • SkyHunter

    Is that the market I hear whispering?
    BP decided the revenue from the wind business is more valuable than capital investment, based on the bids they received.
    Since renewable energy in the US is growing fast, the market indicates that investing in future renewable energy installations is a better value than buying existing infrastructure.

    • Matt

      Could be with the PTC extension, others got a better value for their money making a new 2.6GW than buying BP existing. Maybe they like the new turbines better. Maybe BP can/will sell it off in few years. Still hard to say that BP has decide to make wind/PV a major portion of the BP brand. All you can really say is “BP decided the revenue from the wind business is more valuable than the bids they received”.

  • h2osmb

    I’ve been reading a number of articles about energy diversity in business and in countries. These articles talk about countries and businesses (BP had that thing in the Gulf, that they kinda botched) that have not necessarily been friendly or kind to the US, but they are looking at clean energy alternatives to there energy portfolios either to diversify or for more independence from petroleum based economies. It seems to me that the US is always seen as a taker of resources’, why can’t we extend the olive branch and give something back to the world in the way of independence into the clean energy world. There will always be a need for oil, in the form of grease and fuel for or current set of vehicles. But, if we continue to be on the for front of clean energy innovation we can give back to the world, instead of taking all the time. This may seem pie in the sky with our current congressional mess, but instead of spying on these other countries lets give them and us the ability to be forward thinking and independent in the future.

  • DoRightThing

    Renewable energy technologies are on the verge of going viral. This will depress fossil fuel demand, depress oil revenue, and make borderline reserves such as tar sands uneconomic to continue extracting.

    There is so much more room for growth in renewables than in old-fashioned, mature and atrophying fossil fuels, and I think we can be sure that after the pollution and climate-hammering that China has received recently we will see them go all-in to ramp up solar and wind generating capacity and force the world to follow.
    Fossil fuel companies would do well to rebrand as energy companies, and retool as appropriate if they want to survive the next few decades.

    It’s encouraging that BP seems to have seen the writing on the wall at last.
    “The stone age didn’t end because of a lack of stones”

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