British Petroleum pulls out of British renewables

by Michael Smith

Energy giant British Petroleum (BP) has shelved plans for a wind farm on the Isle of Grain in Kent and appears to be pulling out of the renewable energy sector in the UK.

A spokesperson for BP said that the company has no intention to invest in other renewable energy projects in the UK for the time being.

BP has a £5bn renewable energy spending programme for the next seven years, but now says most of the cash will be spent in America, where the company says it will get more favourable returns on its investment due to better government incentives to pursue clean tech.

President-elect Barak Obama has pledged $150bn over ten years to stimulate the renewable energy markets in the USA.

While the company cites difficulty in getting planning permission in the UK as reasons for the decision, and also economies of scale were mentioned, the real truth, while there is a problem with planning permission and NIMBY-ism in the UK, is money, plain and simple. The UK government is not going to fund such projects to the same tune as US President-elect Barak H Obama has suggested the US would do.

Michelle Thomas, head of the clean energy and sustainability team at Eversheds, a law firm with a proven track record in environmental issues, said: "The news that BP has dropped all plans to build wind farms and other renewables schemes in Britain has been suspected for a while.

"This ties in with shareholder pressure generally in oil and gas to focus on core business or where there are clear financial synergies.

"The departure of BP and similar players will be seen as having a negative impact particularly for the offshore wind program where their offshore expertise and balance sheet strength are key assets."

BP leaving the field of renewable energy, especially the offshore wind energy programs, hopefully will not lead to others of the same caliber deserting the ship as well. The problem, however, is that it could and this would set the UK wind energy developments back for years to come.

© M Smith (Veshengro), December 2008