Latest news with #windfarms
Times
4 days ago
- Business
- Times
BP offloads US wind farms in continued retreat from green energy
BP has offloaded its American onshore wind farm business as it continued its retreat from green energy. The sale to LS Power should help the FTSE 100 oil and gas group towards its target of $20 billion of divestments by 2027. It is seeking to shore up its heavily indebted balance sheet, including through asset sales of $3 billion to $4 billion this year. The sale of the US wind farms began in September last year, with BP saying at the time that the assets were 'not aligned' with its plans for growth in its solar venture Lightsource BP. Murray Auchincloss, chief executive, then pledged in February to 'fundamentally reset' BP's strategy, has abandoned most of the green energy goals set under his predecessor Bernard Looney and refocused the company on focus on oil and gas. BP declined to disclose the value of the wind farms deal but promised to give further details as part of its second-quarter results in early August. Irene Himona, analyst at Bernstein, said: 'Using 2024 average global renewables transaction multiples as a reference point, we estimate the deal consideration could reach circa $2.2 billion or above.' However, sources indicated the value was likely to be significantly lower than this, as the global averages did not reflect prices for ageing assets in the American market. BP is also looking to sell its Castrol lubricants business and a stake in Lightsource BP. It has already announced a deal this month to offload its petrol stations in the Netherlands for an undisclosed sum, thought to be in the hundreds of millions of dollars. BP has global operations including drilling for new oil and gas discoveries and retailing fuel and Marks & Spencer convenience food. It reported underlying profits of $8.9 billion last year. Its US wind farm business comprises ten operational wind farms that were mostly built or acquired in the mid to late 2000s as part of BP's first push into green energy. Lord Browne of Madingley, when chief executive, established 'BP Alternative Energy' in 2005 as the oil giant promised to go 'Beyond Petroleum'. BP wholly owns five of the wind farms, in Indiana, Kansas and South Dakota, and has 50 per cent stakes in five others in Colorado, Indiana, Pennsylvania, Idaho and Hawaii. They have a total generating capacity of 1.7 gigawatts and BP's share is 1.3 gigawatts. William Lin, BP's executive vice-president for gas and low-carbon energy, said: 'We have been clear that while low-carbon energy has a role to play in a simpler, more focused BP, we will continue to rationalise and optimise our portfolio to generate value. The onshore US wind business has great assets and fantastic people but we have concluded we are no longer the best owners to take it forward.'
The Guardian
4 days ago
- Business
- The Guardian
BP agrees to sell US onshore wind business as it shifts back to oil
BP has agreed a deal to sell off its onshore wind business in the US as the oil multinational turns its back on renewable energy after a failed attempt to go green. The company said it would sell its share of 10 windfarms, which generate enough clean energy to power more than 500,000 US homes, to the New York-headquartered LS Power. The terms of BP's deal with the power and energy infrastructure company were not disclosed. However, the value of the windfarms, nine of which are operated by BP, is understood to be lower than the $2bn (£1.5bn) valuation estimated for BP's onshore wind business in the past. The sale is part of BP's plan to offload $20bn in assets 'to simplify and focus the business' after a failed attempt to reinvent the oil multinational as a net zero energy company, and as it comes under pressure over its sluggish share price. BP said it was 'no longer the best owners' to take the wind business forward. Renewable energy in the US has faced increasing pressure under Donald Trump's presidency. The deal emerged weeks after one of the architects of BP's failed green agenda, Giulia Chierchia, stepped down from her role as executive in charge of sustainability strategy to 'pursue other opportunities' outside the company as it shifted back towards oil and gas production. She will not be replaced at BP, the company said. BP's botched green ambitions have contributed to a collapse in the company's share price over recent years, which has made the 120-year-old company easy prey. Shell was forced last month to deny market speculation that it planned to snap up its smaller rival. Shell has lost almost a third of its market value in the past year and is now worth about £58bn. Its reported interest in BP emerged months after the activist hedge fund Elliott Management amassed a stake in the company to agitate for changes to BP's strategy and its board. So far the turnaround plan spearheaded by BP's chief executive, Murray Auchincloss, has failed to convince investors that the company can recover from a difficult few years during which its rivals have thrived by focusing on fossil fuels while global markets have been volatile. Sign up to Business Today Get set for the working day – we'll point you to all the business news and analysis you need every morning after newsletter promotion Auchincloss plans to shore up BP's balance sheets by completing $3b-$4bn of divestments this year, and has already agreed deals worth $1.5bn. He is expected to set out further progress on the divestment drive alongside the company's financial results for the second quarter in the first week of August. Meanwhile, BP is searching for a new chair to replace Helge Lund. William Lin, the head of the company's gas and low-carbon energy business, said: 'We have been clear that while low-carbon energy has a role to play in a simpler, more focused BP, we will continue to rationalise and optimise our portfolio to generate value. 'The onshore US wind business has great assets and fantastic people, but we have concluded we are no longer the best owners to take it forward.'
Irish Times
4 days ago
- Business
- Irish Times
BP offloads US onshore wind business as it pivots back to oil
BP has struck a deal to offload its US onshore wind business to LS Power, as the FTSE 100 energy major pushes ahead with its pivot back towards fossil fuels in a bid to revive its share price. The wind farms, spread across seven states, are all operational and have a combined capacity of 1.7GW, of which BP owns 1.3GW. The sale is the latest move in a $20 billion (€17 billion) divestment programme, announced by BP in February, to streamline its business and boost returns to shareholders after a period of lacklustre performance. READ MORE The terms of the deal, announced on Friday, were not disclosed. In April, BP said it had signed or completed $1.5 billion of divestments already in 2025 and expected to raise a total of $3 billion to $4 billion from asset sales over the course of the year. Some previous estimates have valued the BP's US onshore wind business at as much as $2 billion. However, pricing for recent transactions involving US wind farms of a similar age suggests the value is likely to be lower. BP said the deal followed a 'competitive' 10-month auction process. [ Shell denies takeover talk, but BP's woes persist Opens in new window ] After completion of the transaction, which is expected before the end of the year, BP Wind Energy will form part of LS Power's subsidiary Clearlight Energy, increasing the North American energy group's operating fleet to about 4.3GW. The move comes as BP seeks refocus on its core oil and gas operation. William Lin, the company's executive vice-president for gas and low-carbon energy, said on Friday that green energy still 'has a role to play' in its portfolio, adding: 'The onshore US wind business has great assets and fantastic people, but we have concluded we are no longer the best owners to take it forward.' David McWilliams on how 'big incentives' to build could save Dublin city Listen | 36:51 The UK oil major put the wind energy business up for sale last September. At the time, Lin said the onshore wind business was 'not aligned' with BP's plans for growth in Lightsource bp, its solar energy business. BP is also exploring a sale of its lubricants arm Castrol, which has drawn interest from private equity and industry bidders and could be valued at $8bn, though some parties are considering making lower bids, the Financial Times reported in June. Over the past 12 months, BP's share price has fallen more than 10 per cent, sparking speculation that it could be ripe for a takeover. Activist investor Elliott Management has built a stake and been pressuring the board to shake up the business. Last month, rival Shell was forced to deny rumours that it was planning a bid for BP, saying it had 'no intention' of making an offer for the company. This month, BP warned that lower oil and gas prices were likely to hit second-quarter earnings, despite it increasing production. The company said it expected earnings in its oil business to be $600mn-$800mn lower in the three months to the end of June than the previous quarter, while gas would be between $100mn and $300mn lower. BP's shares rose 1.9 per cent in morning trading. – Copyright The Financial Times Limited 2025
The Guardian
4 days ago
- Business
- The Guardian
BP agrees to sell US onshore wind business as it shifts back to oil
BP has agreed a deal to sell off its onshore wind business in the US as the oil multinational turns its back on renewable energy after a failed attempt to go green. The company said it would sell its share of 10 windfarms, which generate enough clean energy to power more than 500,000 US homes, to the New York-headquartered LS Power. The terms of BP's deal with the power and energy infrastructure company were not disclosed. But the value of the windfarms, nine of which are operated by BP, is understood to be about $2bn (£1.5bn). The sale is part of BP's plan to offload $20bn in assets 'to simplify and focus the business' after a failed attempt to reinvent the oil multinational as a net zero energy company, and as it comes under pressure over its sluggish share price. BP said it was 'no longer the best owners' to take the wind business forward. Renewable energy in the US has faced increasing pressure under Donald Trump's presidency. The deal emerged weeks after one of the architects of BP's failed green agenda, Giulia Chierchia, stepped down from her role as executive in charge of sustainability strategy to 'pursue other opportunities' outside the company as it shifted back towards oil and gas production. She will not be replaced at BP, the company said. BP's botched green ambitions have contributed to a collapse in the company's share price over recent years, which has made the 120-year-old company easy prey. Shell was forced last month to deny market speculation that it planned to snap up its smaller rival. Shell has lost almost a third of its market value in the past year and is now worth about £58bn. It reported interest in BP emerged months after the activist hedge fund Elliott Management amassed a stake in the company to agitate for changes to BP's strategy and its board. So far the turnaround plan spearheaded by BP's chief executive, Murray Auchincloss, has failed to convince investors that the company can recover from a difficult few years during which its rivals have thrived by focusing on fossil fuels while global markets have been volatile. Sign up to Business Today Get set for the working day – we'll point you to all the business news and analysis you need every morning after newsletter promotion Auchincloss plans to shore up BP's balance sheets by completing $3b-$4bn of divestments this year, and has already agreed deals worth $1.5bn. He is expected to set out further progress on the divestment drive alongside the company's financial results for the second quarter in the first week of August. Meanwhile, BP is searching for a new chair to replace Helge Lund. William Lin, the head of the company's gas and low-carbon energy business, said: 'We have been clear that while low-carbon energy has a role to play in a simpler, more focused BP, we will continue to rationalise and optimise our portfolio to generate value.' 'The onshore US wind business has great assets and fantastic people, but we have concluded we are no longer the best owners to take it forward,' Lin added.
Telegraph
6 days ago
- Business
- Telegraph
Reform warns wind and solar builders it would scrap their subsidies
Reform has told Britain's biggest wind and solar developers it would scrap their green energy subsidies if it won power, in an attempt to sabotage Ed Miliband's renewables expansion. Richard Tice, the party's energy spokesman, has written to the chief executives of SSE Renewables, Octopus Energy, Centrica, Equinor and others to give 'formal notice' that a Reform government would tear up any deals struck with Mr Miliband. Mr Tice said the company should treat any deals struck with Labour as 'politically and commercially unsafe', wording seemingly intended to undermine Mr Miliband's bid to woo wind companies to build in Britain. The move, backed by Nigel Farage, comes ahead of the crucial next round bids for subsidies to build new wind and solar farms in Britain – known as Allocation Round 7 (AR7). Developers can apply for 'contracts for difference' (CfDs) from the Government, which offer developers a guaranteed minimum price for their power for up to 20 years. The subsidies are significant, totalling £1.8bn last year. The cost is added to consumer and business energy bills, which are now amongst the world's highest. Such costs are set to rise sharply in the coming years, in line with the expansion of renewables and subsidy prices. Mr Miliband is racing to build new wind farms in as he seeks to decarbonise Britain's power system by 2030. 'Soaring energy bills' In his letter, Mr Tice said the plan was imposing 'intolerable costs on households and manufacturers'. He added: 'Allocation Round 7 will add billions of pounds of subsidies and other costs to UK energy bills as well as threatening the stability of the grid. 'There is no public mandate for the real-world consequences of this agenda, soaring energy bills, industrial decline, the imposition of intrusive infrastructure and the erosion of national energy security. 'Reform UK is now leading in the national opinion polls and a future government led by Nigel Farage is now more likely than not. If elected, or if we hold the balance of power, we will immediately reassess all net zero commitments, prioritising low cost, reliability and security of supply over spurious decarbonisation targets 'As a first step, we will seek to strike down all contracts signed under AR7. You should treat any long-term revenue streams as politically and commercially unsafe.' Energy analyst Kathryn Porter, of Watt-Logic, said: 'Reform is signalling that it will not honour these new contracts in the hope it will deter developers from entering the auctions and limit their legal recourse should Reform win the next General Election and make good on its promise to cancel these new subsidies.' Adam Bell, of Stonehaven, an energy consultancy, said: 'A commitment by Reform to tear up contracts signed by a previous government is a direct challenge to the rule of law and means that the cost to the government of any future contract will inflate hugely. 'If the Government cannot be trusted to uphold a contract, then we will all pay, through our bills or through our taxes.' Contracts for difference Under AR7, which is expected to launch in the next few weeks, Mr Miliband will offer developers guaranteed minimum prices to build 12 gigawatts (GW) of offshore wind and 12-14GW of onshore wind, the latter mostly in England. This roughly translates into 1,500 offshore turbines and 2,000 onshore. Similar subsidy rounds are planned for 2026 and 2027. Mr Miliband also wants 30GW of new solar panels, an amount that would cover about 650 sq km if it were all ground-mounted. Again, most of this will be built in England. Renewable energy needs billions of pounds to build and connect to the grid and is generally not competitive without subsidies. That mean investors will only commit to build wind, solar and other renewables if they have a guaranteed minimum price for the power generated – effectively a subsidy. Mr Miliband's Department for Energy Security and Net Zero was approached for comment as were the companies to which Reform sent its warning note.
