Executing on a strategic decision to focus on the U.S. onshore wind energy market, BP has exiting from other countries. It has just sold 100 MW of wind energy capacity in India to Green Infra Limited, an independent power producer backed by India’s infrastructure-focused private equity group, IDFC.
BP’s decision mirrors those of Shell and other investors who have exited from Asia and Europe to focus on the U.S. onshore wind energy market. Most European markets are saturated or lack competitive incentives. In comparison, the U.S. has vast tracts of unexploited wind energy potential with excellent Renewable Portfolio Standard-driven incentives. As a result, one can expect continued growth of the U.S. onshore wind energy market and slower development of global offshore wind energy projects.
Offshore wind will, in principle, leverage the project engineering and execution talents of the oil majors but is fraught with high cost, regulatory uncertainty, and technological complexity. Offshore wind costs anywhere from two to three times the cost of onshore wind. Regulatory and renewable certification policies for offshore wind are currently undefined. Finally, no single technology platform has evolved as an industry leader for massive adoption — a strategy oil majors have found successful in their wind investments.
Sensing a long-term opportunity in this flux, GE has purchased ScanWind, a Norwegian wind turbine company.
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