24/11/2023 by Mark
BP is looking for new partners around the world to help it deploy projects at a lower cost.
With the renewable sector having been blighted by an increasing cost for raw materials, elevated capital costs, and sluggish permitting processes, BP has targeted 6-8% in internal returns for its renewables business, which is headed up by Anja-Isabel Dotzenrath. BP recently wrote down $540 million on its New York offshore wind farm projects, with it citing red tape and inflation. Dotzenrath recently said that the wind power sector in the US was “fundamentally broken.” She said about the company’s plan to cut costs:
“Of course, inflation is not just an issue for projects in the U.S.A. We are also trying to reduce costs in other regions using various levers, for example through optimised purchasing strategies, which may also lead us to invest directly in the supply chain.”
She cited partnering up with local utilities in Japan for offshore wind power projects, saying that this was necessary for making an onshore grid connection available and navigating the permitting process. She also mentioned how hydrogen was another of BP’s targeted growth areas, but this had hit a bottleneck due to a shortage of electrolyzers to produce green hydrogen from water and renewable power. She said this problem could be addressed by becoming an anchor investor in projects to build facilities for making them.
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