BP has the largest operated renewables business among our oil and gas peers
Renewables will play an increasingly important role in a lower carbon future. They are projected to grow seven times faster than all other energy types combined. Today, they account for around 3% of global energy demand, excluding large-scale hydroelectricity.
BP has been producing renewable energy for more than a decade. Our strategy is to invest in renewable energy where we can build commercially viable businesses at scale. With a focus on biofuels and wind, we have the largest operated renewables business among our oil and gas peers. This means that we are directly managing these businesses - from manufacturing biofuels from sugar cane to generating and distributing wind energy.
We are also evaluating other areas where we can access lower carbon, commercially attractive opportunities to complement our existing businesses.
Biofuels can help reduce emissions from transportation, the fourth-largest source of greenhouse gas (GHG) emissions today. They can be used in existing cars and infrastructure without major changes.
Our biofuels business in Brazil makes ethanol and sugar from sugar cane. Brazilian sugar cane ethanol has life cycle GHG emissions that are 70% lower than conventional transport fuels. And, when used in hybrid vehicles, it can deliver similar GHG life cycle emissions reductions to electric vehicles.
Since we acquired majority ownership of the Tropical mill in 2011, we have more than doubled our production of ethanol equivalent. In 2016, our three sites produced 733 million litres of ethanol equivalent. We estimate that our ethanol production avoided around 515,000 tonnes of CO2, equal to 241,000 fewer European cars on the road for a year.
We are investing in the development and commercialization of biobutanol, in conjunction with our partner, DuPont. Compared with other biofuels, biobutanol has the potential to be blended with fuels in higher proportions and be easier to transport, store and manage.
Our Brazil biofuels business takes sustainability into consideration across the value chain. We make electricity from burning bagasse - the fibre that remains after sugar cane stalks are crushed. This low carbon power supplies energy for our mills and the local electricity grid. Our electricity exports represent around 11% of our mills’ total revenues.
The sustainability of biofuels can vary greatly depending on the raw materials used and agricultural conditions. Brazilian sugar cane is one of the most land-efficient feedstocks for producing biofuels and other products. Less than 2% of the land used for crops and pasture in Brazil goes towards sugar cane cultivation for ethanol. Even at this scale, enough ethanol is produced to fuel around half of the cars in Brazil.
Our largest biofuels mill is certified to Bonsucro, an independent standard for sustainable sugar cane production.
Sugar cane cultivation has the potential to increase pressure on water resources. The water intensity of our sugar cane cultivation in Brazil averages around 14 kilograms of water per kilogram of sugar and ethanol. This is slightly higher than in 2015, due to drought early in the season, which led to more irrigation. Sugar cane ethanol water intensity still compares favourably to that of many agricultural food crops within the region.
In the world today, wind power accounts for over half of all renewable power. And, we expect that - with decreasing production costs - onshore wind will become even more widespread.
BP is among the top wind energy producers in the US. The net generating capacity from our portfolio, based on our financial stake, is 1,452 megawatts of electricity. That’s enough electricity to power almost 400,000 homes. And, we calculate that our wind activities helped avoid around 2.54 million tonnes of CO2 in 2016.
The US wind industry continues to experience steady growth, particularly with continued improvements in efficiency and costs, which have fallen by more than half since 2009.Laura Folse, CEO, BP wind energy