Release date: 3 July 2018
BP has a significant biofuels business in Brazil, where we operate three large scale sugar cane ethanol facilities producing around 776 million litres of ethanol a year as well as supplying biopower to the grid. In addition our joint venture with DuPont, Butamax, is developing an advanced bioproduct - bio-isobutanol - which can be used both as an advanced biofuel and in biochems. Our Wind Energy business has 14 sites in the US powering homes in surrounding states and we have important partnerships such as Lightsource BP (solar).
The biggest challenge my team and I face is determining where to focus our efforts. We are basing our choices on seeking the right business models, which create value, are scalable and play to our capabilities and overlaps with the rest of BP.
Along with Wind and Solar, Bioenergy is one of the main sources of renewables. It has a particular role to play in the transport and chemicals sectors where there is a need for liquids that are compatible with existing supply and logistic infrastructure and vehicles. We believe that low carbon sustainable biofuels offer one of the best large-scale solutions to reduce emissions from transportation.
If you look at the history of renewables, advances in materials were the key enabler for their success. The first silicon PV cells had ~1% efficiency, while nowadays the PV cells that Lightsource BP uses in its projects typically exceed 20%. Likewise, it was the advances in material that enabled wind turbines to grow in size and efficiency, to become the largest renewable currently.
And it is also about performance of materials, and through our JV with Onyx InSight we apply advanced sensing and monitoring technologies to improve the efficiency and the operational uptime of wind energy and industrial equipment. Last, it is innovation in material which is unlocking new business opportunities in energy storage. BP Alternative Energy is looking into how to best combine storage with renewables, and we are piloting this with Tesla on our Titan wind site in the US.
In one scenario in the BP Energy Outlook, renewables like wind and solar account for around half of the increase in power out to 2040, and their share in total power generation increases from 7% today to around 25% by 2040.
As part of BP's approach to the energy transition we are focused on reducing our operating emissions, improving our products and creating low carbon businesses. Alternative Energy has been working with existing Upstream businesses to evaluate commercial and technical feasibility of integrating renewables into the Upstream operations by adding renewable generation.
Natural gas is the ideal complement to renewables. One reason for that is that natural gas can be a lower carbon, cost-effective back-up to the variability of renewables such as solar and wind. As BP is building our renewable businesses and growing gas in the portfolio, we are working very closely with other parts in our group such as Upstream and Trading to develop new business models which integrate renewables with gas.