The company has formed BP Alternative Energy, Sunbury, U.K., to manage its efforts in solar, wind, hydrogen and combined-cycle-gas-turbine (CCGT) power generation. Annual revenue could reach $8 billion within a decade, says BP. Already-established BP Solar on its own is expected to hit $1 billion in business in 2008.
“Our recent experience, particularly with solar, has given us the expertise and confidence to develop new products and markets alongside our mainstream business. We are now at a point where we have sufficient new technologies and sound commercial opportunities within our reach to build a significant and sustainable business in alternative and renewable energy,” notes BP chief executive Lord Browne.
Initial investment, totaling around $1.8 billion over the next three years, will be split about equally among solar, wind, hydrogen and CCGT power generation.
The company, which already has the capacity in the U.S., Spain, India and Australia to manufacture more than 100 megawatts of photovoltaic cells annually, plans to double that capacity by the end of this year. BP says the solar market is growing at 30% per year, a faster rate than for any other type of renewable energy, and claims it has a 10% share of the global market.
Outlays for hydrogen will include the world’s first commercial project, in Peterhead, Scotland, to convert natural gas to hydrogen by stripping out carbon dioxide, which will be pumped into depleted oil reservoirs. The hydrogen will be used to generate 350 megawatts of electricity. BP also is exploring the possibility of making hydrogen from low-value coke byproducts at a U.S. refinery and generating 500 megawatts of electricity by building an adjacent power plant.
Wind power will get significantly more investment than in the past. BP says it owns land that could be the site of the first large-scale U.S. wind farm, generating up to 200 megawatts in 2007.
The company will focus CCGT investments in the U.S., where it already has significant cogeneration capacity, and is finalizing plans for a $400-million unit at one of its major sites to deliver 100 megawatts to the plant and 420 megawatts to the local grid.