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BP Eyes Offshore Wind Ventures and Hydrogen Investments in Japan

The global shift away from fossil fuels has prompted BP to significantly expand its presence in low-carbon energy, aiming for a sustainable business model.

November 18, 2023. By News Bureau

In a strategic move amidst challenges posed by inflation and logistical bottlenecks in the renewables sector, BP is embarking on partnerships for offshore wind projects in Japan and contemplating investments in hydrogen technology companies.

The global shift away from fossil fuels has prompted BP to significantly expand its presence in low-carbon energy, aiming for a sustainable business model.

Anja-Isabel Dotzenrath, head of BP's renewables division, emphasized the urgency of executing plans and identified Japan as a key market for growth. "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.

Recently, BP reported a USD 540 million write-down on its wind power projects off the coast of New York, attributing it to inflationary pressures and bureaucratic hurdles that led to projects exceeding budgets and timelines.

Dotzenrath stressed the need for global cost-reduction initiatives and outlined strategies involving optimized purchasing approaches and potential direct investments in the supply chain to address these challenges.

In the offshore market, BP aims to establish three to five clusters of four to eight gigawatts each globally, with Japan emerging as a prime target. Local partnerships, particularly with energy suppliers, are deemed essential for navigating permitting processes and establishing onshore grid connections in Japan.

Beyond offshore wind, BP is exploring opportunities in the hydrogen sector, considering investments in technology manufacturers and potentially becoming an anchor investor in electrolyser production facilities, even though BP doesn't produce these units directly.

BP has outlined ambitious plans to allocate up to $65 billion of its investments between 2023 and 2030 towards renewables, hydrogen, biofuels, and electric mobility. The company aims to channel half of its investments into these sectors by the end of the decade, compared to 30 percent in 2022.

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