Published on March 22nd, 2018 | by Tina Casey0
Another Renewable Energy Baby Step For BP, Another Deep Dive For Enel
March 22nd, 2018 by Tina Casey
At the recent Symposium on Sustainability in Venice, CleanTechnica got a first-hand chance to compare how two energy giants, BP and Enel, are managing the road to decarbonization. Enel reinforced its headlong dive into renewable energy while BP underscored a much more cautious path. That contrast came into full force just this week with new announcements from the two companies.
Giant Renewable Energy Steps For Enel
Enel’s big renewable energy news came earlier this week, when the company confirmed that electricity from its new 320 megawatt Rattlesnake Wind Farm in Nebraska would go to two high profile buyers, Facebook and Adobe.
The deal is significant because the wind farm project stalled out all the way back in 2013 when its former developer couldn’t find a buyer for its clean power. Since then, wind energy costs have dropped, energy storage options have emerged, and US corporate citizens are more eager to get their hands on reliable electricity sources with stable, predictable rates.
Enel’s early focus on renewable energy also put it in a good position to take advantage of new opportunities that arise when otherwise conservative communities catch on to the bottom line advantages of renewable energy development. Here’s what CleanTechnica had to say about Enel’s Rattlesnake revival last year:
Wind farms also have a share-the-wealth angle that few fossil fuel projects can match. Rural Nebraskans may have mixed opinions about climate change, but it’s difficult to argue with the cold, hard cash flowing out of wind farms and into local coffers.
The $430 million, 320 megawatt project will sprawl across a 32,000-acre swath of land that involves more than 100 owners, who will benefit from a total of $80 million in property taxes and direct payments in the first 20 years of the wind farm’s operation.
Another significant aspect of the project is the intricate deal worked out with the region’s utility, the Omaha Power District. The first-of-its-kind arrangement enabled Facebook to claim 200 megawatts of the wind farm’s capacity, enough to provide for 100% of the electricity for its new Omaha data center.
Now that a template has been developed, there is the potential for similar deals to follow.
Yet another advantage is the relatively short timeline for completing the project. Construction on the wind farm got under way last November and is expected to be completed before the end of this year.
Meanwhile, Baby Steps For BP
BP made a big move into solar last year with its $200 million acquisition of the company LightSource, and earlier this year the company pumped $5 million into an EV charging venture in Europe and the UK.
The company’s most recent renewable energy move is on a significantly smaller scale, though the payoff could be outsized. Through its BP Ventures arm, the company is pumping $500,000 into a group of participants in a startup network called Incubatenergy:
The strategic relationship will provide BP Ventures the opportunity to collaborate with Incubatenergy’s senior industry leadership and cleantech start-up companies. It also will support BP Ventures’ mission of growing, developing and investing in new energy solutions for a lower-carbon future, specifically with a focus on power and storage, advanced mobility and digitization of the energy sector.
By the way, did you know that Incubatenergy is a project of the US Department of Energy’s National Renewable Energy Laboratory, in partnership with the Electric Power Research Institute? No, really.
Incubatenergy lays claim to getting 500 venture-backed start-ups into development so far. In the new collaboration, BP will work with eight of Incubatenergy’s founding members to scout promising new technologies.
The company is also committed to participating in biannual meetings with other networks:
BP participation in these meetings will give these incubators and accelerators insight into BP’s priorities, and develop relationships and connections that will enable BP Ventures to preview the innovations emerging from the national and international Incubatenergy ecosystem.
Many Roads To Decarbonization
To recap, Enel is focusing on here-and-now opportunities that deploy proven renewable energy technology for a quick transition to decarbonization. In contrast, BP is putting its eggs in a basket that includes a way forward for its oil and gas assets.
That difference is comes into sharper focus when you consider BP’s description of its Ventures arm:
BP Ventures identifies and invests in private, high growth, game-changing technology companies, accelerating cutting-edge innovations across the entire energy spectrum…
BP Ventures’ portfolio is primarily focused on emerging technologies in oil and gas exploration and production and downstream conversion processes. In addition, it has a renewed strategic focus on five key areas: bio and low carbon products, carbon management, power and storage, advanced mobility and digital transformation.
So, there’s that.
Looking back at the Symposium on Sustainability (CleanTechnica attended as a guest of the event’s sponsor, the Italian company Alcantara), here are some relevant comments from Ernesto Ciorra, Enel’s Chief Innovability Officer:
Innovation is like the Force in Star Wars, there is a light and dark side. If you don’t innovate, you die
The meaning of sustainability is to survive. Why do you want to have a sustainable company? To survive. If you don’t innovate, you die.
Ciorra noted that Enel has not invested in “conventional” electricity generation since 2014, and he emphasized the bottom line focus of that strategy:
This is not doing good to do good, this is doing good to make money.
Here’s another take on the bottom line angle:
Companies should adopt United Nations sustainable development goals because “sustainability is a way to make money.” Every big problem means big money. If you’re able to solve big problems, you make big money.
Enel is looking at 2050 for its decarbonization goal, though Dr. Ciorra predicts that the changeover could come as early as 2035.
Now take a look at some comments from BP’s Head of Long Term Planning and Policy, Dr. Paul Jefferiss. Dr. Jefferiss approached the decarbonization issue as a matter of creating “strategic resilience” — basically, generating more energy with less greenhouse gas emissions:
There is a growing demand for energy in foreseeable future. Large populations expect different standard of living, but there is a large need for a lower carbon economy.
As Dr. Jefferiss sees it, growth in the renewable energy sector is not the only key factor leading to decarbonization:
Evolving transition scenarios don’t change overall demand very much. They mainly change the fuel mix, and even with renewables the carbon emissions still remain high. In other words, the renewable energy scenario doesn’t deliver the goods.
That’s a matter of argument, but the bottom line is that BP is still looking at a significant role for oil and gas in the low carbon economy of the future. In part, the company expects to lean on efficiency improvements — trapping fugitive methane emissions, for example — to improve its carbon profile.
BP also expects to leverage the user end for reducing its carbon profile, for example by developing new products including additives that improve efficiency as well as biofuels and biobased lubricants.
Check out the company’s 2018 Energy Outlook for scenarios moving into 2040. The company also just released a Technology Outlook that foresees improvements in oil and gas technology — leading to an increase in proven reserves — though that doesn’t necessarily mean an increase in demand.
In a question-and-answer period following the presentation, Jefferiss underscored the contrast between BP and Enel, with BP taking a road “more evolutionary than revolutionary.”
There’s still a possibility that another major renewable energy buy like LightSource could be the stars for BP, but the company’s main focus for the foreseeable future will be on its meat and potatoes, oil and gas.
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