BP has announced plans to invest US$500 million (£358.5 million) in low carbon businesses each year as it looks to further embrace the low carbon transition.
The oil and gas giant has just reported its 2017 financial performance - a full year underlying profit of US$6.2 billion - allowing the firm to continue with its five-year strategic plan to embrace the energy transition. The investment commitment mirrors Shell’s recent plans to invest as much as US$2 billion per year in low carbon development.
BP’s investment strategy is to focus on five key areas in which it wishes focus, namely; advanced mobility; bio and low carbon products; carbon management; power and storage, and digital. Power and storage investments will aim to build on BP’s existing portfolio of 15GW of wind generation and the 6GW it is supporting the development of via Lightsource BP.
Within the digital corner of BP’s investment plan it has ambitions in areas which most other energy companies are currently interested. Digital platforms like blockchain, AI and quantum computing have all been targeted by BP, giving an indication as to where the oil giant sees the energy market shifting.
Elsewhere, electric vehicles, charging and vehicle autonomy are areas of interest within BP’s advanced mobility section, perhaps best evidenced by the company’s recent investment in mobile charging technology provider Freewire.
All this can be seen as highly significant. Oil and gas firms have an important role to play in the energy transition owing to the fact that these fuel sources account for nearly 60% of total energy use across the world. Overall in 2017, renewables generated 30% of Europe's electricity for the first time despite being only a rise of 0.2% owing to the huge growth in wind generation being almost completely offset by the lowest hydro electricity generation in a decade.
Geographically, the majority of that growth was in Germany and the UK alone with progress in the deployment of wind, solar and biomass in the UK, Germany and Denmark in particular seeing these technologies overtake generation from coal for the first time following a 12% increase in 2017.
Wind, solar and biomass grew to 20.9% of the EU electricity mix. This is up from just 9.7% in 2010, and represents an average growth of 1.7 percentage points per year. If this rate continued, then it is just sufficient for total renewables to hit 50% of the EU electricity mix by 2030.
However, the research points out that this growth has become more uneven, with Germany and the UK alone contributing to 56% of the growth in renewables over the last three years. The skewed performance is also reflected in the technologies seeing the most growth, with wind generation rising by 19% in 2017 (two thirds from Germany and the UK) while solar was responsible for just 14% of the renewables growth in 2014 to 2017, despite huge falls in price.
Matthias Buck, Director of European energy policy at Agora Energiewende, said: "Progress on renewables has been increasingly reliant on the success story of wind in the UK and Germany, which has been inspiring. They demonstrate that if all countries in Europe engage in the energy transition, 35% renewable energy by 2030 is entirely feasible. Solar deployment, however, is surprisingly low, and needs to increase in line with the massive fall in costs".
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