According to reports quoting information from three industry and company sources, BP is considering purchasing the remaining 50% of its solar power joint venture Lightsource BP (LSBP) as part of its effort to increase its capacity for renewable energy.

The internal discussions follow last month’s slowdown of BP’s transition away from oil and gas by Chief Executive Officer Bernard Looney, who nevertheless committed to raise expenditure on renewables and low-carbon fuels by $8 billion by 2030.

For $200 million, BP purchased a 43% share in Lightsource in 2017 and increased its ownership to 50% two years later.

According to two of the individuals, a transaction would value LSBP’s present portfolio at about $2 billion, though the final price might be considerably higher depending on how much is thought to be worth the company’s long-term operations.

“The number is in the eye of the beholder,” one source close to the talks told Reuters. “So much depends on what you believe the future of the solar power sector to be.”

There were no comments on the issue from BP and LSBP.

London-based The Chief Executive Officer of LSBP, Nick Boyle, who owns the bulk of the remaining 50% interest, created the company in 2010, and it is now regarded as one of the leading developers of solar photovoltaic projects worldwide.

It presently operates in 19 countries and has around 9 gigawatts (GW) of projects in development. By 2025, it intends to build 25 GW of solar plants, Boyle told Reuters in October.

According to its most recent filing, LSBP is still in the midst of a significant investment period, which resulted in a loss of 173 million pounds ($211.5 million) at the end of 2021 as opposed to 22.3 million pounds a year earlier.

In addition to developing solar projects independently of LSBP, BP also did so in the US in 2021, when it bought 9 gigawatts of solar projects from 7X Energy.

According to the terms of the two businesses’ contract, the energy giant considered increasing its interest in LSBP to 80% in 2019, but decided for a modest increase to 50%, in part because of cost considerations, one source said.

According to the sources, taking over LSBP would enable BP to expand its access to renewable energy generation, streamline decision-making for projects and investments, and integrate it with its own solar production.

However, since the coronavirus pandemic, rising costs for raw materials and transportation have greatly impacted the profitability of renewable energy projects.

The internal conversations take place as BP’s head of renewables and natural gas, Anja-Isabel Dotzenrath, reviews the company’s solar and onshore wind operations in the wake of recent restructurings involving the offshore wind and hydrogen businesses.

Since Dotzenrath, the former CEO of RWE Renewables, assumed office a year ago, BP has changed its approach to renewable energy. It now hopes to make hydrogen and biofuel using the majority of the solar and wind energy it produces, in addition to powering its global network of charging stations for electric vehicles.

According to BP’s annual results, solar accounted for 25.7 GW of the 43 GW overall renewables project pipeline at the end of the previous year, including BP’s stake in LSBP.

By 2030, the corporation wants to increase its renewable energy capacity to 50 GW.

(Adapted from EnergyLiveNews.com)