BP needs a big deal to become the UK wind power champion Business

BP took its first step into the UK’s offshore wind industry in February of this year alone. Its joint venture with a German partner will invest less than £ 1 billion in an option to develop 3 GW of capacity in the Irish Sea. A final investment decision is years away.

By comparison, HSE plans put it on track to deliver more than a quarter of the UK’s 40 GW “Saudi Arabia wind” target by 2030. Certainly, BP has big ambitions in energy. renewables – 50 GW worldwide by 2030 – but with just 3.6 GW currently, it has a long way to go. Even its 23 GW pipeline suggests a transformative deal is needed.

While wind farms may not be in BP’s DNA, making deals certainly is, and with SSE leading the construction of what will be the world’s largest wind farm in Dogger. Bank off the east coast of Yorkshire, a takeover would turn its capacity into renewable energy in one fell swoop. .

Rather than leaving the division adrift to fend for itself, SSE would place it in the hands of a richer backer. Its boss Allistair Phillips-Davies argued that separating SSE Renewables as an independent listing would weaken its ability to finance large-scale projects such as Dogger Bank as its cost of borrowing skyrocketed. BP would not have this problem.

With Shell facing the same challenge of how to switch to clean energy without alienating shareholders, perhaps SSE will be able to generate a bidding war between two parties with deep pockets.

The politics of a rupture cannot be ignored. With its headquarters in Perth, Scotland, and thousands of people employed elsewhere north of the border, Nicola Sturgeon is unlikely to welcome any plan that puts jobs, investment and taxes at risk.

But perhaps she could support BP’s idea as an owner with the financial firepower to increase investment. It is already a large employer in Scotland.

Likewise, you can imagine Westminster liking the idea of ​​the former UK state oil company making a massive bet on the UK’s most promising wind farm operator as the government tries to build the UK’s energy system. tomorrow. ESS is at stake.

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This notice was published: 2021-12-01 18:00:09

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