(Reuters) -BP plans to sell its U.S. onshore wind energy business, it announced on Monday, saying the assets were not aligned with its growth plans.
BP said it will launch the sale process shortly for the wind assets, bp Wind Energy, which has interests in 10 operating onshore wind energy assets across seven U.S. states.
“We believe the business is likely to be of greater value for another owner,” William Lin, BP’s executive vice president for gas and low carbon energy said in a statement.
Several offshore wind companies have cancelled or sought to renegotiate power contracts for planned U.S. projects in the past year, citing soaring materials costs, high interest rates, and supply chain disruptions.
bp Wind Energy’s assets, which have net total generating capacity of 1.3 gigawatts, are not aligned with BP’s plans for growth in Lightsource bp, the London-listed company said.
BP announced in November it would take full ownership of Lightsource bp, Europe’s largest solar energy developer. The deal to build up its renewable energy capacity is expected to be complete by the end of the year.
It said on Monday it would integrate its onshore renewable power development into Lightsource bp.
Don't miss out on any breaking news or insightful opinions!
Subscribe to our free newsletter and stay updated on the go!
By submitting this form, you are consenting to receive marketing emails from: Global Banking & Finance Review. You can revoke your consent to receive emails at any time by using the SafeUnsubscribe® link, found at the bottom of every email.
The move also comes as BP’s new CEO Murray Auchincloss has imposed a hiring freeze and paused new offshore wind projects as he places a renewed emphasis on oil and gas amid investor discontent over its energy transition strategy, sources at the company told Reuters in June.
It marks a stark reversal from the direction the CEO’s predecessor Bernard Looney took to rapidly move away from fossil fuels. This has weighed on BP’s shares as returns from renewables shrank, while profits from oil and gas soared in the wake of the COVID-19 pandemic and Russia’s invasion of Ukraine.
Last month, Danish renewable energy group Orsted reported 3.9 billion Danish crowns ($581.59 million) in impairment losses for the second quarter, partly due to delays in a major U.S. offshore wind project.
($1 = 6.7058 Danish crowns)
(Reporting by Yadarisa Shabong and Arunima Kumar in Bengaluru; Editing by Tasim Zahid and Andrea Ricci)
Uma Rajagopal has been managing the posting of content for multiple platforms since 2021, including Global Banking & Finance Review, Asset Digest, Biz Dispatch, Blockchain Tribune, Business Express, Brands Journal, Companies Digest, Economy Standard, Entrepreneur Tribune, Finance Digest, Fintech Herald, Global Islamic Finance Magazine, International Releases, Online World News, Luxury Adviser, Palmbay Herald, Startup Observer, Technology Dispatch, Trading Herald, and Wealth Tribune. Her role ensures that content is published accurately and efficiently across these diverse publications.
