British Petroleum (bp) reached an agreement to purchase 9 GW of U.S. solar development projects from independent developer 7X Energy. The acquisition is a step toward bp’s target of growing its net developed renewable generating capacity to 20 GW by 2025, with an aim to increase this to 50 GW by 2030.
The deal will grow bp’s renewables pipeline from 14 GW to 23 GW. The assets will be developed through bp’s 50-50 solar joint venture Lightsource bp, applying the subsidiary’s capabilities to accelerate bp’s renewables targets.
bp will pay 7X Energy $220 million for the projects and 1GW of “safe harbor” equipment and expects the acquisition to complete in 30 days. The projects are expected to meet bp’s low-carbon investment criteria, generating returns of at least 8 to 10%.
“With this purchase, we are continuing to put our strategy in action as we grow our renewables business in a deliberate and disciplined way,” said Dev Sanyal, executive VP of gas and low carbon energy at BP. “It brings us 9 GW of high-quality solar projects in markets where we can create integrated renewable energy offers through our trading and customer franchises.
“We will bring the industry-leading expertise of Lightsource bp together with the breadth of bp’s integration capabilities in the US to develop this portfolio of projects,” Sanya continued. “This is a significant step as we continue to deliver on our net-zero ambition.”
The 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 the final investment decision by 2025, with the remaining progressing by 2030. Once developed, these projects will have the capacity to generate enough clean energy to power around 1.7 million US homes. The development is also expected to support thousands of jobs through construction.
“bp’s new high-quality solar portfolio will provide low carbon energy, create US jobs and deliver the competitive returns our shareholders expect,” said Dave Lawler, bp America chairman and president. “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.”
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