Executing on a strategic decision to focus on the U.S. onshore wind energy market, BP has been exiting from other countries. This shift signifies their emphasis on developing onshore wind energy projects within the U.S. It just sold 100 MW of wind energy capacity in India to Green Infra Limited, an independent power producer backed by India’s infrastructure-focused private equity group, IDFC.
BP’s decision mirrors those of Shell and other investors who have exited from Asia and Europe to focus on the U.S. onshore wind energy market. Most European markets are saturated or lack competitive incentives. In comparison, the U.S. has vast tracts of unexploited wind energy potential with excellent Renewable Portfolio Standard-driven incentives. As a result, one can expect continued growth of the U.S. onshore wind energy market and slower development of global offshore wind energy projects.
Offshore wind will, in principle, leverage the project engineering and execution talents of the oil majors. However, it is fraught with high cost, regulatory uncertainty, and technological complexity. Offshore wind costs anywhere from two to three times the cost of onshore wind. Regulatory and renewable certification policies for offshore wind are currently undefined. Finally, no single technology platform has evolved as an industry leader for massive adoption – a strategy oil majors have found successful in their wind investments.
Sensing a long-term opportunity in this flux, GE has purchased ScanWind, a Norwegian wind turbine company.
– Uday Turaga
About ADI Analytics
ADI is a prestigious, boutique consulting firm specializing in oil and gas, energy transition, and chemicals since 2009. We bring deep expertise in a broad range of markets where we support Fortune 500, mid-sized and early-stage companies, and investors with consulting services, research reports, and data and analytics, with the goal of delivering actionable outcomes to help our clients achieve tangible results.
We also host the ADI Forum that brings c-suite executives together for meaningful dialogue and strategic insights across the oil & gas, energy transition, and chemicals value chains. Learn more about the ADI Forum https://www.adi-analytics.com/forum/.
Subscribe to our newsletter or contact us to learn more.
