trending Market Intelligence /marketintelligence/en/news-insights/trending/C5TyD8Sxp-2fqudU4ay1bQ2 content esgSubNav
In This List

Returning to solar, BP to pump $200M into UK developer, eyes US expansion

Blog

Broadcast deal market recap 2021

Podcast

Next in Tech | Episode 49: Carbon reduction in cloud

Blog

Price wars in India: Disney+ Hotstar vs. Amazon Prime Video vs. Netflix

Blog

Volume of Investment Research Reports on Inflation Increased in Q4 2021


Returning to solar, BP to pump $200M into UK developer, eyes US expansion

BP Plc will pump $200 million into London-based Lightsource Renewable Energy Ltd. over the next three years, giving it a 43% stake of Europe's largest solar farm developer, the company announced Dec. 15. Upon completion of the deal, anticipated in early 2018, BP will pay Lightsource a first $50 million tranche. The company already has been renamed Lightsource BP, according to its website.

"We founded Lightsource to lead the solar revolution and chose to partner with BP because, like us, their ambition is to build and grow this company for the long-term," said Lightsource CEO Nick Boyle in a press release. "Not only does this partnership make strategic sense, but our combined forces will be part of accelerating the low-carbon transition."

The transaction marks the oil major's return to solar power after exiting in 2011. A long-time leading manufacturer of photovoltaic wafers, cells and modules, BP shuttered its main production facility in Frederick, Md., in 2010 amid plummeting profitability and product prices sparked by a massive solar manufacturing expansion in China. This time, BP has a different strategy. "While our history in the solar industry was centered on manufacturing panels, Lightsource BP will instead grow value through developing and managing major solar projects around the world," BP CEO Bob Dudley said.

Launched in 2010, Lightsource has commissioned 1,300 MW of solar capacity, manages roughly 2,000 MW and has a 6,000-MW project pipeline in the United States, India, Europe and the Middle East. The new Lightsource BP plans to focus on corporate power purchase agreements with private companies. In April, Lightsource announced a new leadership team to expand in the U.S., led by Tim Derrick, a former general manager at defunct developer SunEdison Inc., which previously partnered with BP on solar projects in the U.S.

BP said it offers "additional value" to Lightsource through leveraging its global scale and integrating solar with its other businesses and trading capabilities. The oil giant's alternative energy unit also includes wind, with interests in 2,300 MW of U.S. projects, and bioenergy. During its hiatus, BP has seen the global solar market explode in the United Kingdom and worldwide. The company's 2035 energy outlook forecasts solar likely accounting for up to 10% of total global power by that time.

The investment comes amid a flurry of recent investments into renewable energy, electric vehicle and smart grid assets by major oil companies, including Royal Dutch Shell plc, which in October agreed to acquire NewMotion, one of Europe's largest electric vehicle charging providers. Shell is also involved in a large-scale solar-generated steam project for oil extraction in California through a joint venture with Exxon Mobil Corp.