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BP is planning to start powering some of its operations in the United States with electricity produced by solar farms, Bloomberg reports, quoting the chief executive of an affiliate, Lightsource BP.
The UK-based supermajor bought a 43-percent stake in Lightsource two years ago, committing to spend US$200 million on the company over a period of three years.
“It’s a no brainer for them to play in solar,” Lightsource’s chief executive Katherine Ryzhaya told Bloomberg. “They’re doing it for financial reasons.”
Indeed, solar power is becoming increasingly competitive as production costs fall and efficiency rates rise, the former faster than the latter. Also, there is the reputation management element that supermajors are no doubt pursuing by turning to renewables to power their oil and gas business.
Last year, even Exxon, which is notorious for its conservative attitude to renewables, sealed a deal with Danish renewable energy company Orsted to buy 500 MW of electricity produced by solar and wind farms to power its oil production in the Permian. Although the terms of the contract remained undisclosed, it was the largest such contract featuring an oil company as a party as of 2018.
Like Exxon, BP has been the target of a lot of criticism—and lawsuits—regarding its attitude to climate change and renewable energy use, not to mention the fallout of the Deepwater Horizon disaster.
The Lightsource move, therefore, makes sense for the supermajor in more than one way. It is also in tune with a commitment to reduce its carbon footprint from earlier this year, while continuing to increase production.
Earlier this month, BP also announced it had struck a partnership with the Environmental Defense Fund to work together on reducing methane emissions in the oil and gas industry globally. The collaboration will focus on methane reduction and management technology, the company said at the time.
By Irina Slav for Oilprice.com
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Irina is a writer for Oilprice.com with over a decade of experience writing on the oil and gas industry.