15 December 2017 2017 10:15 AM GMT

Beyond Petroleum. BP Returns To Solar; Following Shell, Total Into Clean Energy

Lightsource and BP have announced that they have agreed to form a strategic partnership, bringing Lightsource’s solar development and management expertise together with BP’s global scale, relationships and trading capabilities. BP will acquire on completion a 43% equity share in Lightsource for a total consideration of $200 million, paid over three years. The great majority of this investment will fund Lightsource’s worldwide growth pipeline. The company will be renamed Lightsource BP and BP will have two seats on the board of directors. BP is not alone in moving away from oil and gas and towards clean energy. Anglo-Dutch Shell is purchasing electric car infrastructure companies, France’s Total is acquiring battery storage firms and Norway’s Statoil is pioneering floating wind farms.

Nick Boyle, Group CEO and founder of Lightsource, said: “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. Not only does this partnership make strategic sense, but our combined forces will be part of accelerating the low-carbon transition. Solar power is the fastest growing source of new energy and we are excited to be at the forefront of this development.”

Bob Dudley, BP group chief executive added: “BP has been committed to advancing lower-carbon energy for over 20 years and we’re excited to be coming back to solar but in a new and very different way. While our history in the solar industry was centred on manufacturing panels, Lightsource BP will instead grow value through developing and managing major solar projects around the world. I am confident that the combination of Lightsource’s expertise and experience with BP’s relationships and resources will propel this innovative business to even more rapid growth.”

Global installed solar generating capacity more than tripled in the past four years and grew by over 30% in 2016 alone, according to BP’s Statistical Review of World Energy. BP’s Energy Outlook analysis sees solar as likely to generate around a third of the world’s total renewable power and up to 10% of total global power by 2035.

Lightsource is now, a global player in the development, acquisition and long-term management of large-scale solar projects and smart energy solutions worldwide. It has grown in just seven years to become Europe’s largest developer and operator of utility-scale solar projects. The company has commissioned 1.3 GW of solar capacity to date and manages approximately 2GW of capacity under long-term operations and maintenance contracts – the equivalent of powering over half a million homes through clean energy.

BP’s interest in Lightsource BP will complement its existing Alternative Energy business, which includes wind energy, biofuels and biopower. BP Wind Energy has interests in onshore wind energy across the US with a total gross generating capacity of 2.3GW. BP Biofuels has world-scale plants in Brazil, which produce around 800 million litres of ethanol equivalent per year as well as generating low-carbon power for Brazil’s national grid.

Lightsource sees opportunities in integrating solar with BP’s other businesses and trading capabilities as well as through BP’s international scale and relationships. Dev Sanyal, BP’s chief executive for Alternative Energy, added: “We see significant opportunity to offer affordable, reliable, low-carbon power solutions by integrating solar alongside our existing Alternative Energy and gas business. We see Lightsource as a strategic partner with a similar vision and, with the benefits of BP’s global scale and relationships, we together plan to build the global market leader for solar.”

Sanyal also emphasised the changing industry as the driver for the strategy, saying BP was returning to solar because the sector had matured and the model had shifted from manufacturing panels to developing solar farms. Solar “is really an important part of the overall energy mix. It will constitute around 10% of global power in the next 20 years and is growing around 15% per annum. We like the fundamentals of the industry and we like the fundamentals of the company,” he said.

Under the terms of the agreement, BP will pay Lightsource $50million on completion of the agreement, with the balance paid in instalments over three years. Completion is anticipated in early 2018. Lightsource BP will target the growing demand for large-scale solar projects worldwide with a focus on grid-connected plants and corporate power purchase agreements (PPAs) signed with private companies. The company will continue to develop and deliver Lightsource’s 6GW growth pipeline, which is largely focused in the US, India, Europe and the Middle East.

Lightsource has grown exponentially since its foundation in 2010, maturing from a startup into a major global player with considerable size, scale and reach. The company provides full lifecycle services, integrating in-house development, operational management, contracted income (25-30 years+) and deep asset financing expertise. With approximately 2GW under management, of which 1.3GW was developed in-house, The company has established a significant global pipeline across its four divisions: UK & Europe Large Scale Solar (est. 2010); India, Middle East and Asia (IMEA) Large-Scale Solar (est. 2016); North America Large-Scale Solar (est. 2017) and LS Labs Smart Home & Distributed Energy Software (est. 2015).

BP is a global energy business with a wide reach across the world’s energy systems. With over 70,000 employees and activities in more than 70 countries, BP finds, produces and transports oil and natural gas; trades oil, gas, products and power; manufactures and markets fuels, lubricants and petrochemicals; and produces renewable energy through its wind, biopower and biofuels businesses.

Photo: Courtesy of Lightsource BP

January 19th 2018
Chinese Solar Surge Fuels Overall Global Growth In Clean Energy Investment

World clean energy investment totalled $333.5 billion last year, up 3% from 2016 and the second highest annual figure ever, taking cumulative investment since 2010 to $2.5 trillion. An extraordinary boom in photovoltaic installations made 2017 a record year for China’s investment in clean energy. This outpaced changes elsewhere, including jumps in investment in Australia and Mexico, and declines in Japan, the U.K. and Germany. The figures up 3% from a revised $324.6 billion in 2016, and only 7% short of the record figure of $360.3 billion, in 2015.

January 22nd 2018
European Parliament Gives A Resounding Vote In Favour Of Clean Energy In Europe

European lawmakers have called for a renewable energy target of 35% for 2030 – rather than the 27% which the European Commission proposed in 2016. The MEPs have now backed measures substantially raising the European Union’s clean-energy ambitions. By 2030, more than one-third of energy consumed in the EU should be from renewable sources such as wind and solar power. The measures are intended to help cut carbon dioxide emissions. The EU is the world’s third-largest emitter of greenhouse gases after China and the United States, releasing about 10% of global emissions. 

January 8th 2018
Vestas Sets 10.6 GW Record In 2017 After Year-End Surge; Ups Cashflow Guidance

Vestas has received a firm and unconditional order for 190 MW of 4 MW platform turbines in the U.S. taking the global order intake for the company in 2017 to 10.6 GW, surpassing 2016’s record order intake of 10.5 GW. The surge of orders at the end of the year has resulted in the company revising its guidance for free cashflow upwards. It now expects the free cashflow for 2017 to be €1.15bn-€1.25bn, as compared with the previous guidance of €450m-€900m. Markets have reacted favourably with the company share price experiencing an increase of 5%. 

December 27th 2017
Rooftop PV Presents a $23 Billion Opportunity in India Over The Next 5 Years

India is accelerating development of renewable energy projects to provide cheap, reliable and clean power to its 1.3 billion people. The country’s per-capita on-grid electricity consumption has increased significantly over the four years; due to increased industrial activity, higher uptake of electrical appliances by residential electricity users and the addition of new consumers to the grid. During this period, the cost of electricity from rooftop PV has halved, due to fierce competition in the market and a drop in equipment prices. In contrast, average retail electricity rates have increased by 22% in the same period. This has made rooftop PV cheaper than commercial and industrial grid tariffs in all major states in India.


 

   

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