The British oil company BP has offered its onshore wind energy business in the USA for sale, estimated to be worth around 2 billion US dollars. With this move, BP is streamlining its renewable energy portfolio and divesting unprofitable assets. A total of nine fully owned wind farms, as well as an additional stake in a wind farm in Hawaii, are to be sold.
The company will increasingly focus on Lightsource bp, its solar business, which it is currently expanding further. Last year, BP already wrote off its offshore wind business in the USA by $1.1 billion after progress stalled on three projects on the East Coast.
Offshore wind in the USA is fundamentally broken," said the former head of the renewables business, Anja-Isabel Dotzenrath, in November. She left BP in April. William Lin, the new head of BP’s gas and low-carbon energy division, stated on Monday that the onshore wind business does not fit Lightsource bp's growth plans. "We will continue to simplify our portfolio and focus on value," said Lin.
BP has refocused on its core business of oil and gas since Murray Auchincloss was appointed CEO in January. Analysts anticipate that BP might abandon its commitment to reduce oil and gas production to 2 million barrels per day by 2030. The company's stock has dropped more than 20 percent in the last 12 months as investors worry that BP might lower its profit forecasts and cut shareholder distributions.
The wind farms, which are spread across seven U.S. states, have a total capacity of 1.7 gigawatts (GW), of which BP owns 1.3 GW. Analysts from RBC Capital Markets estimate the value of these assets at over 2 billion dollars. "This is another sign that BP is streamlining its energy transition strategy," commented Biraj Borkhataria, an analyst at RBC.
BP has a global onshore wind pipeline of an additional 12.7 GW but did not comment on what will happen with these projects in the USA. However, a person familiar with the company stated that the sale would include the entire onshore wind business.
Solar energy now overshadows wind power as the largest source of renewable electricity generation in the United States. BloombergNEF expects almost three times as much solar capacity to be installed in the U.S. from 2024 to 2035 compared to wind power. Solar energy is considered the most cost-effective form of electricity generation and faces fewer obstacles in terms of permits, grid connection, and supply chain issues.
At the same time, BP announced a $1 billion deal with Apollo Global Management on Monday, involving a stake in the Trans-Adriatic Pipeline, which runs from the Greek-Turkish border to southern Italy.
