British Petroleum (BP) has reached an agreement today to purchase 9GW of solar development projects in the US from independent US solar developer 7X Energy.
The acquisition represents a significant step towards bp’s target of growing its net developed renewable generating capacity to 20GW by 2025 and aim to increase this to 50GW by 2030.
BP will pay 7X Energy $220 million for the projects and 1GW of “safe harbour” equipment and expects the acquisition to complete in 30 days.
The projects are expected to meet bp’s disciplined low carbon investment criteria, generating returns of at least 8-10%.
“With this purchase, we are continuing to put our strategy in action as we grow our renewables business in a deliberate and disciplined way. It brings us 9GW of high-quality solar projects in markets where we can create integrated renewable energy offers through our trading and customer franchises.”Dev Sanyal, BP Executive Vice President of gas and low carbon energy
Solar energy is the fastest growing power source in the US and is expected to quadruple over the next 10 years.
It currently accounts for more than 40% of all new electricity generating capacity added in the US.
The projects are spread across 12 US states, with the largest portfolios in Texas (ERCOT) and the Midwest (PJM).
Assets with a combined generating capacity of 2.2GW are expected to reach final investment decision (FID) by 2025, with the remaining progressing by 2030.
Once developed, these projects will have the capacity to generate enough clean energy to power around 1.7 million US homes.
The development is also expected to support thousands of jobs through construction.