Oil supermajor BP needs partners to succeed in new offshore wind markets such as Japan and could consider investment opportunities in hydrogen electrolyser technology, the head of the company's renewables business told Reuters.
BP has been searching for the right business model to overcome the challenges of rising cost and supply chain constraints that have battered the renewables sector over the last year or two, but the company insists it has been adjusting its net zero plans appropriately for the energy transition rather than pedalling back toward fossil fuels.
Anja-Isabel Dotzenrath, vice-president of gas and low carbon energy at BP, told Reuters that the group has been looking at how to drive down costs globally as it pursues its internal returns target of 6-8% on renewables projects.
Earlier this month, Dotzenrath caused a commotion when she told analysts that the US offshore wind industry was "fundamentally broken". Speaking after BP wrote down $540m on its wind power plans offshore New York, she blamed red tape for delaying projects that were already facing budgetary challenges due to the impacts of inflation.
"Of course, inflation is not just an issue for projects in the US," 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."
In the global offshore wind market, Dotzenrath told the news agency BP is targeting three to five clusters of 4-8GW each, singling out Japan. BP signed a deal with Marubeni in 2022 to look at projects there as part of a push into Asia.
"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 before joining BP last year, also told Reuters that partnerships were crucial in the hydrogen sector, another area BP has prioritised for future growth.
"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.
In 2020, BP set itself the target of becoming a net zero company by 2050. The company has has also set a revised target of reduce operational emissions by 50%, from a 2019 baseline, by 2030.
BP has said it plans to spend as much as $65bn on renewables, hydrogen, biofuels and electric mobility between 2023 and 2030, accounting for half of annual investments by the end of the decade, compared with 30% in 2022.
