Published on August 2nd, 2013 | by Joshua S Hill5
BP Reverses Decision To Sell Wind Business
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.