Posts Tagged ‘Lightsource’

Shell buying spree cranks up race for clean energy

January 26, 2018

Royal Dutch Shell has spent over $400 million on a range of acquisitions in recent weeks, from solar power to electric car charging points – in a bid to reduce its carbon footprint. (AFP)
LONDON: Royal Dutch Shell has spent over $400 million on a range of acquisitions in recent weeks, from solar power to electric car charging points, cranking up its drive to expand beyond its oil and gas business and reduce its carbon footprint.
The scale of the buying spree pales in comparison to the Anglo-Dutch company’s $25 billion annual spending budget. But its first forays into the solar and retail power sectors for many years shows a growing urgency to develop cleaner energy businesses.
The investments are not limited to renewables such as biofuels, solar and wind. Shell, as well as rivals such as BP , Exxon Mobil and Chevron, are betting on rising demand for gas, the least polluting fossil fuel, to power the expected surge in electric vehicles in the coming decades.
To that end, Shell agreed in December to acquire independent British power provider First Utility for around $200 million, according to several sources close to the deal. The value of the acquisition had not been previously disclosed.
Shell declined to comment..
With First Utility, the company hopes to find an outlet for its gas supplies via the retail power market, betting on rising demand as drivers charge electric vehicles at home.
Earlier this month, the company ventured back into solar after a 12-year hiatus when buying a 43.86 percent stake in Silicon Ranch Corporation for $217 million.
In the last three months of 2017, Shell also invested in two projects to develop charging stations for electric vehicles across Europe’s highways. It has also signed agreements to buy solar power in Britain and develop renewables power grids in Asia and Africa.
According to analysts at Bernstein, Big Oil has invested over $3 billion on renewables acquisitions over the past five years, most of which went toward solar.
“Green” merger and acquisition (M&A) activity today averages 13 percent of total energy M&A activity, they said.
“However greater scale is needed for the majors to effectively operate and leverage their trading skills in this market, necessitating more M&A,” they said in a note.
Other companies have also made investments.
BP got back into solar power with a $200 million investment in solar generator Lightsource late last year, six years after exiting the sector with a large writedown.
Total bought battery maker Saft for $1 billion in 2016.

(Reporting by Ron Bousso)


BP warms to renewables with $200m stake in solar developer

December 16, 2017

FT — Financial Times

Image may contain: sky, cloud and outdoor
Oil major returns to field with investment to bolster Lightsource expansion beyond UK

BP is to invest $200m in Europe’s largest solar power developer, marking its return to a sector from which it withdrew six years ago.

The UK energy group will buy a 43 per cent stake in Lightsource, a London-based company developing solar projects in Europe, the US and Asia, under the deal announced on Friday.

The acquisition adds to the growing number of investments by oil and gas producers in renewable energy as the world begins to move beyond fossil fuels.

BP first entered the solar market in the 1980s as a manufacturer and installer of the photovoltaic cells used to harness energy from the sun. It closed the business in 2011 after it was made unprofitable by low-cost competition from China.

Dev Sanyal, BP’s chief executive of alternative energy, said the company had learnt from past failures.

By working with Lightsource in the development and management of solar farms, BP was returning to a more attractive part of the solar market than low-margin panel manufacturing, he added.

“Some of the lessons were pretty tough but it gave us a fundamental understanding of the solar business,” Mr Sanyal said.

Nick Boyle, chief executive and founder of Lightsource, said BP’s global reach and capabilities would strengthen his company’s expansion beyond the UK, where all its 2 gigawatts of operational solar capacity is located.

“BP has relationships around the world built up over 100 years and we can piggy back on that by becoming their in-house solar developer of choice,” he said.

Solar power is the fastest-growing part of the global energy industry after a tripling of installed capacity over the past four years, according to BP data. This expansion has been accelerated by the falling cost of predominantly Chinese-made solar panels.

Rapid growth in renewable power and other “clean” technology such as electric vehicles is forcing oil and gas companies to confront a future in which fossil fuels face increasing competition — as well as regulatory pressure to cut carbon emissions and air pollution.

Royal Dutch Shell agreed in October to buy NewMotion, Europe’s largest electric vehicle charging company. A month earlier, Total acquired a 23 per cent stake in Eren, a French renewable power company, for €237.5m.

BP was the first oil “supermajor” to make significant commitments in renewable energy and adopted the slogan “Beyond Petroleum” in the 2000s.

Most of its $8bn of “green” investments during that era were written off but the group still has wind assets in the US and a biofuels business in Brazil.

Mr Sanyal said there was potential for BP to integrate renewables and natural gas assets with its power trading business to deepen the group’s role in the electricity supply chain. The aim was to make Lightsource the global market leader in solar power, he added.

Lightsource, founded in 2010 and owned by its management and staff, will receive an initial $50m from BP upon completion of the deal early in 2018, with the $150m balance paid in instalments over three years.

The company will be renamed Lightsource BP and BP will have two seats on the board. Mr Boyle said BP was chosen from a shortlist of three potential investors.

Lightsource develops, finances and operates solar arrays under long-term power purchase agreements, usually with corporate customers.

Notable projects include a 23,000-panel floating solar farm on Thames Water’s Queen Elizabeth II reservoir near London. It has 6GW of capacity in development around the world.