London-based oil giant BP has changed its renewable energy tune, moving its investments in wind to the more favorable U.S. onshore market, and dropping plans for wind developments in the UK, China, India and Turkey.
“It’s a big place and it’s got a lot of wind,” Robert Wine, spokesman for BP, told us. Wine said there are also existing regulatory frameworks in the U.S. that are helpful, both to boost development and to provide incentives.
Tax credits for renewable energy, which were set to expire at the end of this year, were extended in October as part of the government’s bailout bill for Wall Street. President-elect Barack Obama, meanwhile, has pledged to invest $150 billion in alternative energy over the next decade.
Wine said BP’s decision to concentrate its wind plans on the U.S. market hasn’t affected the company’s other renewable initiatives, among them solar, biofuel and other projects, in the UK or elsewhere. But the UK could be hit hardest by the wind news, as the region is aiming to supply a third of its electricity from wind by 2020. That target has already been criticized as likely being unachievable, according a recent investigation in The Observer.
And this is the second blow to the UK wind market by an oil giant. In May, Netherland’s Royal Dutch Shell announced that it would pull out of the massive London Array project, expected to be the largest offshore wind farm in the world when it’s built.
BP had planning permission for an onshore wind farm on the Isle of Grain in the UK, which it is no longer going forward with, and Wine said the company has no plans to bid for any offshore licenses in the region.
The U.S. has the largest potential wind market in the world, with the industry on track to install a total of 7,500 megawatts this year, up from 5,249 in 2007, according to the American Wind Energy Association. BP is already a significant investor in U.S. wind; its portfolio includies the opportunity to develop about 100 projects with a potential total generating capacity of 15,000 MW.
“By the end of this year, we should have about 1 GW of wind farms installed capacity, and three times that within a couple of years,” said Wine.
In China, BP has dropped out of a partnership with Goldwind Science & Technology, according to Reuters. The companies were planning to build a wind power project in Inner Mongolia. That project and BP’s plans for Turkey never made it past the early discussion stage, according to Wine.