BP’s Wind Power Plan Sails Ahead to U.S.

London-based and the world’s third largest global energy company BP PLC (BP) announced Friday that will end its planned wind power projects in Britain, India, China and Turkey and instead focus the bulk of its $8 bln renewables spending on the United States.

The decision, notes the Guardian newspaper, is a major blow to the prime minister, Gordon Brown, who has promised to eliminate all impediments to ensure Britain is at the forefront of the green energy revolution. UK aims to supply a third of its electricity from wind by year 2020.

The London-based oil giant will also shelf ideas of building a UK onshore wind farm at the Isle of Grain in Kent and will not bid for any offshore licences. “The best place to get a strong rate of return for wind is the US,” said a BP spokesman. According to the American Wind Energy Association, the U.S. is potentially the largest wind market in the world, with the industry on track to install a total of 7,500 megawatts this year, up from 5,249 in fiscal ’07.

BP’s decision to scrap British renewables plan follows Shell’s (RDS-B) action to sell off its stake in the London Array project off Kent, potentially the world’s largest offshore wind farm.

Shell gave the same reasons as BP for that move, saying the economics of UK wind were poor compared to those onshore across the Atlantic, where president-elect Barack Obama has promised to spend $150 bln over the next decade to kick start a renewable energy revolution.

Despite the economic slowdown and deterioration in some markets, demand for more energy continues to grow as populations rise and emerging economies develop. The world’s primary energy consumption increased in fiscal ’07 for the fifth consecutive year. This rise in demand is happening simultaneously with the growing concentration of a majority of oil and gas reserves in relatively few places. Oil is obviously a finite resource. Renewable energy is plentiful.

BP plans to spent about $1.5 bln next year on US wind projects and the company is expected to spend the $8 bln up to the year 2015.

On Thursday, China’s largest maker of wind turbines Goldwind Science & Technology Co., said BP Alternative Energy, a company that combines all of BP’s interests and investments in alternative energy projects, had decided to suspend its wind power business in Asia.

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About Ron Haruni 1068 Articles
Ron Haruni is the Co-Founder & Editor in Chief of Wall Street Pit.

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