CompaniesBasf SeFollowBp PlcFollowEnBW Energie Baden Wuerttemberg AGFollowShow more companiesBERLIN/LONDON, Nov 17 (Reuters) – BP (BP.L) is seeking partners for offshore wind projects in Japan and may invest in hydrogen technology companies to tackle inflation and equipment bottlenecks that have battered the renewables sector.The oil major plans to expand in low carbon energy in the coming decades as it seeks a long-term business model that can survive the global transition from fossil fuels. Some investors have criticised the strategy for taking BP’s focus from higher returns on oil and gas businesses.But Anja-Isabel Dotzenrath, who leads BP’s renewables business, told Reuters it was “time to deliver” and seeking partners in Japan, one of the markets identified for growth, was part of the solution.Earlier this month, she said the U.S. offshore wind industry was “fundamentally broken” after BP wrote down $540 million on its wind power projects offshore New York, blaming inflation and red tape that meant projects ran over budget and over time.Globally, the renewables sector has been undermined by slow permitting, technological challenges, rising raw material costs and higher costs of capital.BP’s renewable partner Norway’s Equinor (EQNR.OL), also took a related $300 million impairment, while Denmark’s Orsted (ORSTED.CO), the world’s No.1 offshore wind project company, scrapped two local projects and suffered billions of euros of writedowns.As BP seeks to guarantee it can meet its internal returns target of 6% to 8% on renewables projects, Dotzenrath said BP was working out how to reduce costs globally.”Of course, inflation is not just an issue for projects in the U.S.A.,” she said. “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.”PARTNERSHIPS IN WIND AND BEYONDIn the global offshore market, BP group is targeting three- to-five clusters of four-to-eight gigawatts each, Dotzenrath said, singling out Japan, where BP is likely to team up with local utilities.”You need a Japanese partner, otherwise you can’t be successful there. You need one of the local energy suppliers to help you push ahead with the permitting processes and establish the onshore grid connection,” she said.Dotzenrath, who steered the renewables business of Germany’s top utility RWE (RWEG.DE) before joining BP last year, said partnerships were crucial to addressing a bottleneck that has also become a problem in the hydrogen sector, another area BP has prioritised for future growth.BP does not produce electrolysers, which split water to produce hydrogen, but Dotzenrath said did not rule out greater involvement.”This could mean, for example, that we’ll become an anchor investor in a leading technology manufacturer that is building a production plant for electrolysers,” she said.Germany, which under Chancellor Olaf Scholz hopes for a major role…
Source from www.reuters.com
