Energy giant bp announced today an agreement to acquire a portfolio of 9 GW of solar development projects in the US from developer 7X Energy. According to the terms of the agreement, bp will pay 7X Energy $220 million for the projects and 1GW of “safe harbour” equipment. The deal is expected to close in 30 days.
Dave Lawler, bp America Chairman and President, said:
“bp’s new high-quality solar portfolio will provide low carbon energy, create US jobs and deliver the competitive returns our shareholders expect.
“In line with our strategy, we’ll aim to integrate these projects with our existing onshore and offshore wind, natural gas, and trading and shipping businesses to give customers what they want – reliable, affordable and clean energy.”
The acquisition marks a significant expansion in bp’s renewables portfolio, increasing its pipeline to 23 GW from 14 GW currently, a major step for bp towards its goal of reaching 50 GW of renewable generating capacity by 2030. The goal forms part of bp’s Energy Transition Strategy, launched in August 2020, and the company’s target to achieve net zero emissions by 2050.
Dev Sanyal, bp Executive Vice President of Gas and Low Carbon Energy, said:
“With this purchase, we are continuing to put our strategy in action as we grow our renewables business in a deliberate and disciplined way. It brings us 9GW of high-quality solar projects in markets where we can create integrated renewable energy offers through our trading and customer franchises.”
The acquired projects are spread across 12 US states, with the largest portfolios in Texas (ERCOT) and the Midwest (PJM). Assets with a combined generating capacity of 2.2GW are expected to reach final investment decision (FID) by 2025, with the remaining progressing by 2030. The assets will be developed through bp’s 50-50 solar joint venture Lightsource bp.
Nick Boyle, Group Chief Executive Officer of Lightsource bp, said:
“This transaction speaks volumes about the success of our JV with bp, and how we leverage each other’s strengths to realize our ambitions for solar and a low-carbon future. It also positions Lightsource bp as a growing force in the US solar market, as we expand our portfolio across the United States.”
Global investments in renewable energy have been growing rapidly, with a recent IEA report indicating a 45% increase in renewables capacity additions during 2020. Last month, the IEA indicated that renewable energy investments would need to surge to nearly $5 trillion by 2030 – with solar at the forefront – in order to put the world on the pathway to net zero emissions by 2050.