British Petroleum (BP) is contemplating the inclusion of partners into its solar developer, Lightsource BP, in a bid to bolster returns from the rapidly expanding business, CEO Murray Auchincloss disclosed on Tuesday.
The move follows BP's announcement last November of its intention to acquire full ownership of Lightsource BP (LSBP), acquiring the remaining 50% stake in the joint venture for $322 million. This strategic maneuver aligns with BP's overarching ambition to augment its renewable energy capacity.
Speaking to Reuters after the company revealed an annual profit of $14 billion in 2023, Auchincloss conveyed that discussions have been underway with potential partners to join the solar business once the LSBP transaction finalizes, likely by mid-year.
“It was a really opportunistic moment for us to take control of 100% (of LSBP). We will repackage the investment, we'll bring in partners,” Auchincloss remarked, emphasizing the strategic repositioning of the investment.
While acknowledging ongoing conversations with companies, Auchincloss refrained from definitive decisions regarding partner integration.
With pressure mounting from investors to demonstrate robust returns from its renewable energy ventures, BP aims to capitalize on LSBP's competitive returns in the mid-teens, which parallel those in the oil and gas sector.
Furthermore, Auchincloss outlined BP's intention to eventually engage partners in its offshore wind projects, underscoring the company's broader strategy to diversify its energy portfolio.
Founded in 2010 by Chief Executive Officer Nick Boyle, LSBP has emerged as a leading global developer of solar photovoltaic projects. Over the years, it has expanded its operations from three to nineteen countries, boasting a solar capacity of 8.4 gigawatts and a substantial development pipeline of 61 gigawatts. The company currently employs over 1,200 personnel.
BP's continued efforts to fortify its position in the renewable energy sector through strategic partnerships reflect a broader industry trend towards sustainable energy solutions.