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BP to Supply Renewable Power to Amazon's Europe Data Centers

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BP plc (BP - Free Report) recently announced that the company has inked a deal to provide renewable energy to European data centres that drive Amazon.com, Inc.’s (AMZN - Free Report) cloud platform, Amazon Web Services (“AWS”). Commencing in 2021, the British energy giant will supply AWS with power from more than 170 megawatts (MW) of wind and solar projects, which are located in Spain and Sweden. Notably, the amount of power is enough to supply 125,000 homes in Europe per annum.

The company plans to supply 122 MW of renewable energy to AWS from its onshore windfarms under construction, in Västernorrland, Sweden. This project is expected to come online in 2022. Starting in 2021, it will supply 50 MW of energy from its new solar firm located in Spain. BP expects its renewable energy supply to AWS to exceed 400 MW in the future.

The latest deal is expected to enable both the companies to reduce emissions from their respective operations. Investors are currently pushing energy companies to abide by the targets set by the Paris Agreement to counter global climate change. As such, this contract will likely receive support from environmental groups and institutional investors.

Moreover, this will strengthen the relationship between the companies. BP’s relationship with AWS recently crossed another milestone, as the energy company intends to close two European mega data centers, while transitioning 900 key applications and the entire data from the same to AWS. The move is in line with BP’s objective of enhancing digitization of its operations and infrastructures. In addition, this is expected to increase BP’s operational efficiency and reduce capital expenditures.

Performance

Headquartered in London, BP is a leading integrated energy player. The company surpassed the Zacks Consensus Estimate in the last four quarters, with the average being 16.8%. BP’s shares have lost 2.3% year to date compared with 5.2% fall of the industry it belongs to.

Zacks Rank and Stocks to Consider

Currently, the stock carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the energy sector include Antero Midstream Corporation (AM - Free Report) and Phillips 66 (PSX - Free Report) , each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Antero Midstream’s bottom-line estimates for the current quarter are expected to skyrocket 120% year over year.

Phillips 66’s 2019 earnings per share have witnessed nine upward estimate revisions and no downward movement in the past 60 days.

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