BP has agreed to sell its wind power plants worth about $1.5bn in the US, as part of its plan to withdraw from renewable energy and focus on core oil and gas business.
The British oil and gas company said that the sale will create more value for shareholders, if it finds an attractive offer.
The sale of wind plants would leave BP with only biofuels business, principally sugar cane ethanol in Brazil, and some research initiatives as leftovers of its drive into alternative energy. The company has already withdrawn from the solar industry and dropped investment in the development of carbon capture and storage technology.
BP CEO Bob Dudley said in March that the company had ‘thrown in the towel on solar’ after trying to make money at it for 35 years. Furthermore, BP also cancelled plans to build a $300m advanced cellulosic ethanol plant in Florida in 2012, citing it could earn better returns elsewhere.
Bruce Hamilton, an analyst at Navigant, told the Financial Times that a rough approximation for the price of established wind farms, which have exhausted part of the value of their tax credits, would be about $1m per megawatt, suggesting the BP business could be worth about $1.5bn.
Asian energy firms looking to establish a foothold in the US wind market could be interested to acuire BP’s wind energy plants. These companies, however, may face problems for approval of deals from the US Committee on Foreign Investment due to political sensitivities.
BP, which operates 2,600Mw wind power plants in nine US states, was the 12th-largest owner of wind power in the US in 2011.
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