BP’s joint solar venture, Lightsource BP, will more than double its global expansion by 2025 after clinching a financing deal worth $1.8bn (£1.3bn) to develop enough solar farms to power the equivalent of 8.4m homes.
The fast-growing operation had initially set a target to develop arrays of panels with a total capacity of 10 gigawatts by 2023, enough for almost 3.4m homes, but the fresh funds will be used to turbocharge its ambition to 25GW by 2025.
It also plans to build an extra 9GW of solar farms exclusively for the oil corporation as part of BP’s plan to grow its renewable energy capacity 20 fold by the end of the decade.
BP has set one of the most ambitious renewable energy goals for a major oil company as governments prepare to ramp up climate action. The current global gas market crunch has further strengthened the political resolve to reduce the reliance on gas.
Solar power could help to cut the amount of gas used to run power plants during the summer months. It could also produce green hydrogen, which can be stored and used in place of gas throughout the year.
Lightsource BP’s founder and chief executive, Nick Boyle, told the Guardian that the future of the solar industry would be driven by demand for green hydrogen – extracted from water using renewable electricity – to replace gas in power plants, factories and transport.
“Hydrogen could be shipped around the world as an energy source, which essentially came from the sun but is captured as a gas, and burned the same way as historic hydrocarbons,” he said.
Dev Sanyal, the head of BP’s low carbon business, described Lightsource BP’s $1.8bn solar boom as “a big acceleration for a company which has been leading the energy transition”.
Lightsource was founded by Boyle in 2010. He agreed to sell BP a stake in the company seven years later – turning it into Lightsource BP – in the hope of growing its 1.6GW solar business more than six-fold by 2023.
Sanyal said: “In the four years since we formed Lightsource BP, it has tripled its footprint and doubled its workforce. The speed and breadth of that expansion is testament to the power of this partnership.”
The venture is expected to create over 500 new jobs within the company over the next four years and expand its global footprint across 15 countries. Sanyal, who will leave BP at the end of the year, said the work of Lightsource “plays into the strategy” of the oil company to invest in “high value” renewable energy projects.
“Lightsource BP has developed more than 30 projects, which today have consistently delivered 8% to 10% returns. So when people ask if we really have the capability to deliver the returns we talk about, the answer couldn’t be clearer – yes, we can because we are,” Sanyal said. “And quite frankly we love it – because it works.”
Boyle added: “Globally, renewable energy is shifting from a mindset of gigawatts to terawatts. Investments are being made by the billion, not the million. And big companies like Amazon, McDonald’s and eBay are switching to clean energy. This trend proves that renewables are mainstream and solar is playing a key role in addressing the climate crisis.”