After adding markets number 13 and 14 in Portugal and Greece, Asia is now firmly on the radar for Lightsource BP in a rapid expansion helped by the ability of its oil & gas supermajor co-owner to open doors across the planet, a top executive at the solar group told Recharge.
“They are in every country. We’ve done projects in difficult countries and they’re not worried about it,” Lightsource BP CEO of Europe and International Kareen Boutonnat said of BP, which has a 50% of share of the PV developer after first buying a stake in late 2017.
“They help us go into countries that we would never attempted on our own, that would have been too risky.
“It opens up a lot of new markets where BP has a significant presence, is well entrenched, and [has] good political relationships.”
And in an era when some oil & gas groups are rebranding entirely to distance themselves from their fossil heritage, Boutonnat added: “The fact that we’re called Lightsource BP [means] we walk into any new country and people know who we are. That brand has got us through a great deal.”
The Lightsource BP executive spoke after the developer entered two new European markets within a few days and brought its total pipeline up to 20GW.
Boutonnat said Portugal is a natural extension of its existing foothold in Spain. The company will co-develop five large-scale, early-stage projects with a local partner with a view to bringing them online between 2023 and 2026. Lightsource BP envisages selling power to some of the same corporate and utility customers that already buy from its Spanish projects.
Greece was until recently a less obvious market. “Not all the ingredients were there,” said Boutonnat. “But you now have a spot market, the ability to sell the electricity outside of the government auctions. That is really important for us, [to have] multiple routes to market,” she said, adding that Lightsource BP aims for roughly a 70% contracted to 30% merchant mix in its European projects.
Both Portugal and Greece have two of the main ingredients Lightsource BP is looking for – good solar irradiation and a government with stated ambitions in clean energy.
The joint venture’s expansion has quickly seen it build a major presence in Europe and the US, but its pipeline in Asia is so far sparser. That will soon change, Boutonnat indicated.
“There are a lot of interesting opportunities in Asia Pacific. We are very interested in Taiwan and have a team on the ground in a number of countries in Southeast Asia to take a look more closely.
“Over time we can see having an EMEA region, and Asia Pacific and Americas region. We need to build that third leg of the stool.”
Lightsource BP’s Asian adventure could include opportunities to co-locate solar with other industries, especially aquaculture, Boutonnat said.
She was more cautious about floating solar – a sector where the developer was an early pioneer in Europe, and which is tipped for rapid expansion in Southeast Asia. Although conceding that floating technology has come a long way in recent years, Boutonnat said: “The problem with floating is it is more expensive than standard ground-mounted solar.
“You also have all the health and safety issues that come with mating water with electricity.”
The advantages of having BP as a co-owner go beyond the ability of its name to open doors, according to Boutonnat.
Energy trading know-how
The JV and the oil giant are working together on a number of opportunities in green hydrogen, which is “clearly the next big opportunity” for renewable power, and where she expects to see solar/H2 projects competitive within about five years, depending on the market and application.
BP also has formidable energy trading and marketing ability that has proved “super-important – a real value added they bring to the markets” in terms of selling the power generated by Lightsource BP’s projects.
The admiration between BP and its solar JV is a mutual one. BP CEO Bernard Looney has hailed Lightsource BP’s ability to deliver solid returns in the 8-10% range that the supermajor is targeting for a wider stable of renewable energy projects that will span wind, PV and bioenergy – and a net 50GW 2030 target that’s among the most ambitious of any fossil group.
Boutonnat said future returns from projects should be bolstered by the rewards for “first mover risk” as, with the help of its co-owner, Lightsource BP opens up whole new markets for solar.