LONDON (Reuters) – Oil major BP (BP.L: Quote, Profile, Research) plans to spend up to $8 billion over 10 years developing alternative energies such as wind and solar, capitalizing on growing interest in low carbon power, the group said on Monday.
A new unit called BP Alternative Energy will manage a fleet of projects that BP said had the potential to deliver sales around $6 billion a year within a decade.
BP said an initial $1.8 billion would be invested over the next three years, spread in broadly equal proportions between solar, wind, hydrogen and gas-fired power generation.
"Our recent experience, particularly with solar, has given us the expertise and confidence to develop new products and markets alongside our mainstream business," BP Chief Executive John Browne said in a statement.
"We are now at a point where we have sufficient new technologies and sound commercial opportunities within our reach to build a significant and sustainable business in alternative and renewable energy," he added.
Investment will be made step by step, BP said, and would depend on the nature of opportunities and their profitability.
"As the pricing of carbon develops through trading schemes and other initiatives, the market will grow rapidly as low-emission technologies displace less clean forms of power generation," the company said.
BP said the new unit would be based in Sunbury, southwest of London, and would initially employ some 2,500 around the world.
It will be headed by Steve Westwell, reporting to Vivienne Cox, chief executive of BP’s gas, power and renewables division, BP said.