In its bid to optimize its U.S. wind portfolio, BP plc (BP - Free Report) is selling three wholly-owned BP wind facilities in Texas to funds managed by affiliates of Ares Management Corporation.
BP has decided to divest three wind energy plants namely Silver Star (60MW generating capacity), Sherbino Mesa 2 (145MW) and Trinity Hills (225 MW) to restructure its portfolio for the longterm with focus on upgrading its other sites.
The proceeds raised through the sale will be used to finance technology upgrades at other projects within its extensive U.S. wind portfolio. After the sale of these plants, BP will continue to own interests in 11 wind farms in eight states, 10 of which it operates.It will have a net ownership of more than 1000 megawatts of wind power.
With growing protests from environmentalists to curb emissions produced by the energy players, most are transitioning their portfolio to accommodate renewable sources of energy. Besides wind energy, BP has considerable biofuels and biopower businesses. It is a major player in the global solar energy market through its shareholding in Lightsource BP and is moving aheadwith plans to commercialize Butamax bio-isobutanol technology in partnership with DuPont.
About 50% of BP’s venturing investments focus on low-carbon solutions, including carbon capture use and storage.In another instance, BP acquired Tela Battery for its 25-megawatt wind farm in central South Dakota. Tesla battery will be installed at the 10-turbine Titan 1 project in the second half of 2018. Commissioned in 2009, Titan 1 comprises 10 2.5-megawatt Clipper turbines.
Initiatives by Other Oil Companies
Royal Dutch Shell plc (RDS.A - Free Report) intends to reduce carbon footprint by 50% through 2050 by growing into renewable energy and reducing exposure in oil and gas. The company plans to allocate about 4-7% of its investments into renewable sources of energy, especially wind, solar and gas, until 2020.
In December 2016, a consortium led by Royal Dutch Shell, won a tender for the 680-megawatt Borssele III and IV zone in the Dutch North Sea. Since then, the company has divested 45% stake in the project to Swiss investment manager— Partners Group.
Even French oil major TOTAL S.A. (TOT - Free Report) is diversifying into renewable energies with an agreement to buy 74.33% of Direct Energie — France’s third-largest electricity supplier — forabout €1.4 billion. On completion of the deal, the companywill forward the offer to buy the remaining shares at the same price.
In 2017, Direct Energie purchased French renewables firm, Quadran. The installed capacity of 1.35 gigawattcomprised 550 megawatt of renewables and a 2 gigawatt pipeline.
Currently, BP carries a Zacks Rank #3 (Hold).
Another better-ranked player in the same sector is SunCoke Energy, Inc (SXC - Free Report) , sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
SunCoke acquires, owns and operates coke making and coal mining operations. The company delivered average positive earnings surprise of 302.6% in the last four quarters.
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