BP is selling off its U.S. onshore wind business, including its Indiana wind farms along Interstate 65.
The London-based energy giant reached a deal last week to sell BP Wind Energy North America Inc., which operates 10 wind farms with 1.3 GW of electric generating capacity, to LS Power for a not-yet-disclosed sum. The New York City-based energy company will take over BP's three Fowler Ridge wind farms along I-65 north of Lafayette, a familiar landmark for Region residents driving south toward Indianapolis.
BP is divesting from wind production as it adopts a new strategy that focuses less on low-carbon energy and more on traditional fossil fuel-based energy production to appease activist shareholders after years of lagging behind its peers on financial performance. BP had been investing heavily in green energy as it looked to diversify. However, crude oil prices rose, benefiting energy companies like Shell and Exxon that remained focused on the oil and gas business.
The company is now shedding $20 billion in assets as it looks to simplify and streamline its business.
“We have been clear that while low carbon energy has a role to play in a simpler, more focused BP, we will continue to rationalize and optimize our portfolio to generate value," said William Lin, the company's executive vice president for gas and low carbon energy. "The onshore U.S. wind business has great assets and fantastic people, but we have concluded we are no longer the best owners to take it forward. I am pleased we have reached a mutually beneficial deal with LS Power and I look forward to working with them to support our people in maintaining safe and reliable operations as we transition ownership.”
LS Power's portfolio company Clearlight Energy will run Fowler Ridge, located about 30 miles northwest of Lafayette, and the other BP wind farms. Its operating fleet will grow to 4.3 GW.
BP is selling off the three Fowler Ridge windfarms, two of which it owns outright and one of which it owns half of. Together, they generate up to 587 MW of renewable electric production.
It is also unloading wind farms in Kansas, South Dakota, Pennsylvania, Colorado and Hawaii. Collectively, they can generate 1.7 GW, but BP only owns 1.3 GW of that production as it has often developed them as joint ventures with partners.
All of the wind farms are connected to the grid and providing electricity to utilities.
LS Power will incorporate the wind farm into its 21 GW portfolio that includes 780 miles of high-voltage transmission lines and another 350 miles under development.
“We are focused on a holistic approach to advancing American energy infrastructure that includes improving existing energy assets while investing in transformative strategies that make energy more efficient, affordable and available," LS Power CEO Paul Segal said. "Well-located with well-structured contracts, these new assets will expand our renewable energy presence and help to meet growing energy demand across the U.S. We look forward to welcoming the talented teams operating these assets to LS Power and partnering with them to drive value for our stakeholders.”
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