Lightsource BP: one year on and going global
The anniversary of BP's investment in Europe's largest solar developer is coinciding with its announcement of expansion into Brazil, the latest step in the company's growing global footprint
As 2017 drew to a close, BP joined forces with a trailblazing company called Lightsource, Europe’s largest solar developer. The goal was to take the UK-based business global and, one year on, the Lightsource BP partnership has more than doubled its footprint around the world and has just announced a move into renewables-friendly Brazil, where the market potential for solar is huge.
“A year ago, Lightsource was the established solar leader in Europe. Today, we are recognized as a global solar leader,” says its chief strategy officer, James Brooks.
In just 11 months, the company has been awarded significant corporate power contracts in the US and Australia, entered the Egyptian energy market through a joint venture, and established a £500 million green energy infrastructure fund in India.
And this week, Lightsource BP announces its presence in Brazil, meaning the business is now active in 10 countries – up from just five only a year ago.
“Brazil is a massive market with huge potential. It is an existing key geography for BP, too, and we already are seeing huge opportunity,” says Vlasios Souflis, Lightsource BP’s international business development director, who is heading up this latest market entry into Latin America.
“I started in this business six years ago, when we were just finding our feet in the UK and a few hundred megawatts seemed a big ambition. We have always been driven, and our partnership with BP is a great enabler. It is just the start for us in Latin America,” Souflis adds.
The team is keen to get started in a country where solar is currently heavily underrepresented in the power generation mix but provides a cheaper, flexible, quick-to-deploy energy option that can be placed close to where the demand is.
Brazil has all the hallmarks of a country in which Lightsource BP can thrive. Speaking about the future growth of Lightsource BP, Brooks says: “I’ve no doubt that we will be 10 to 15 times the size we are today in a decade.” Don’t underestimate the ambitions of the Lightsource BP team, he warns.
When BP announced its stake in Lightsource in late-December 2017, committing $200 million over three years, Brooks was just a year into his role.
The former Goldman Sachs principal and investor went from finance to an operating business because: “I have an enormous personal conviction about the energy transition and the ability to have a real impact.”
It makes good business sense, too. “There is going to be a huge amount of capital flow into new business models,” he predicts. After all, 2017 was also the year in which renewable power grew by almost 20% – higher than the 10-year average – led by solar energy.
“The BP partnership has definitely given our whole team confidence,” Brooks says. “And, if you’re confident, you can put your head down and deliver. But, we haven’t tried to run too fast; we’ve gone slowly to go quickly, if that makes sense. We’ve established a good foundation with BP helping us to embed business processes and, after year one, we’re ready to deliver real growth momentum.”
BP undoubtedly lends its global scale, built up over more than a century, to the partnership, opening doors and sharing its knowledge of operating in territories covering the US, India, Europe and the Middle East. And Lightsource, formed in 2010, also brings something distinctive to the table: a different perspective on individual project and portfolio financing, according to Brooks.
With smaller pockets, comes a different approach. “Our sector is fundamentally about financing. We know many ways in which to finance projects and understand the market for financing very differently.”
Its recent list of new deals includes plans to leverage its expertise in developing innovative power purchase agreements (PPAs) in Iberia, for example. What the two companies have in common is a shared ambition to accelerate the global low carbon transition.
But, while it is proud of projects that are bringing renewable energy to millions of homes in India, for example, the focus this year has been on laying the foundations for further growth, rather than simply building capacity.
Lightsource BP – a year of highlights
November: expansion into Italy, Iberia and Brazil is announced.
November: contracts are signed for 25MW of solar power in Western US.
November: Lightsource BP wins Snowy Hydro contract to supply 105MWp of solar power in Australia.
August: further US expansion is announced with the acquisition of six solar development assets in Pennsylvania and Maryland.
July: announces Egypt market entry through a JV with Hassan Allam Utilities, one of the largest Egyptian construction firms.
June: first utility solar plant in Maharashtra, India, is completed and connected – financed by UK Climate Investments, a JV between the Green Investment Group and the Department for Business Energy and Industrial Strategy.
May: Lightsource BP acquires IoT (Internet of Things) business in Ireland called Ubiworx to strengthen digital capability.
April: enters into power purchase agreement with NSG Group, supplying solar by private wire to Pilkington Glass facility in Lathom, UK.
April: formation of Eversource Capital, a JV with Everstone Group in India, to manage the Green Growth Equity Fund (GGEF).
February: a deal to build, own and operate the largest solar facility in Kansas, US, for the Mid Kansas Electric Company is signed.
“Our growth has been in maturing the organization and getting into a strong operating position for next year. When I think about how we’ve grown as a company, it’s very, very different to just adding megawatts − we have also added great talent and continued to mature and innovate for clients and other stakeholders to stay ahead of the competition,” says Brooks.
Souflis adds: “For us, success is not about just creating megawatts – projects have to be profitable. If it doesn’t make money, it means that we’re not doing good in the world, as we can’t do more of it.”
As the first person on the ground when entering a new territory, he has found that, over the past year, the BP name has opened a lot of doors.
“The brand gives us a credibility that it would take 30 years to develop on our own.
"Reliability is super-important, too – this is a young industry, so it’s like a gold rush, with new players coming into the market who want to flip things quickly. We represent the opposite of that.”
Looking ahead to 2019, Souflis and Brooks are set to continue assessing opportunities together in multiple countries where Lightsource BP has no presence, at the moment, but where solar ‘makes sense’ and where the BP name provides a strategic advantage.
Brooks has a Winston Churchill quote in mind: “Now, this is not the end. It is not even the beginning of the end. But it is, perhaps, the end of the beginning.”
And the battle cry doesn’t stop there.
“We’re getting mission ready for our next big steps,” he says. “And the next big steps are bigger projects and more volume. You could see more consolidation in the renewables industry through mergers and acquisitions.”
