BP's U.S. onshore wind energy business, valued at about $2 billion, has interests in 10 wind farms across seven states. These wind farms generate 1.7 gigawatts of electricity, enough to power more than half a million homes per year. Though none of the wind farms are located in Texas, the company operates nine of them through a remote operations center in Houston.
The oil major is divesting its wind energy assets because they "are not aligned" with the company's growth plans for Lightsource BP, its renewables subsidiary that was Europe's biggest solar developer as of the end of 2023, according to a Monday announcement. BP agreed to purchase the 50.03 percent stake it did not own in Lightsource BP last year.
"We believe the (wind energy) business is likely to be of greater value for another owner. This planned divestment is part of our strategy of continuing to simplify our portfolio and focus on value," William Lin, BP's executive vice president for gas and low carbon energy, said in the Monday statement.
The sale will allow BP to streamline its Houston strategy to what it does best, said Glen Sartain, managing director of energy and utilities at consulting firm West Monroe.
In 2018, BP tried to position its U.S. wind energy business for "long-term growth" by selling its three Texas wind farms to fund technology upgrades for the rest of its wind portfolio. But operating wind assets can be a difficult business for those not in the power generation industry, given the dependence of electricity production on wind conditions, Sartain said. The offshore wind industry has struggled with high interest rates, permitting challenges and supply chain delays, headwinds that the onshore industry is recovering from.
"BP made a fundamental shift," Sartain said. "The effect is that (the wind business) no longer is going to distract from their fundamental core business of producing oil and gas."
There's always the possibility of some worker attrition when a company acquires another business, but Sartain said he'd be "very surprised" if BP's sale of its wind energy division resulted in lost jobs. That's because this particular workforce has an in-demand skill set that a potential buyer would likely want to keep, he said.
BP's move to sell its wind business comes as the company's new CEO, Murray Auchincloss, has pledged to "relentlessly" focus on shareholder returns by ensuring "absolute discipline in investing our scarce capital in oil and gas and our transition businesses." In practice, Auchincloss is reorienting BP back to oil and gas, a departure from the previous CEO who wanted to make renewable energy a bigger part of the company's operations, according to Axios.
BP does maintain one "tranisition" business in Houston, its BP Pulse, its electric vehicle charging subsidiary. BP Pulse opened its first EV charging station in the United States at the company's Houston headquarters in March. It has committed to deploying more than 3,000 chargers by 2025 at airports, major metropolitan areas and BP branded properties around the country.
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