BP targets US retail power market with cleaner fuel mix
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BP has applied to supply US residential customers with electricity as the UK oil and gas major seeks to shift its energy mix towards cleaner fuels.
The company wants to provide electricity generated from wind, solar and natural gas in California, Illinois, Ohio, Pennsylvania and Texas, according to a filing with the Federal Energy Regulatory Commission.
BP has a large power trading division that enables wholesale US sales through bespoke, long-term deals with customers such as cities, but the FERC application is a step towards what would be its first move into the retail sector.
The oil and gas company is creating a new subsidiary called BP Energy Retail to sell electricity straight to US business clients and households “at market-based rates”.
The filing, first reported by Reuters, said “BP Energy Retail is a retail energy marketing company that intends to sell electricity products directly to commercial and industrial customers and residential customers.”
BP pledged last year to become a net-zero emissions business by 2050, promising to increase its renewable power generation capacity 20-fold and invest in cleaner energy businesses in the coming years. It also plans to cut fossil fuel production by 40 per cent.
The company, which reports its first-quarter earnings on Tuesday, said it “requests that the Commission accept the Tariff for filing, without suspension or modification, effective June 20, 2021”.
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BP made its first foray into offshore wind power last year, agreeing to buy a 50 per cent stake in two US projects from Norway’s Equinor for $1.1bn. It is positioning itself to take advantage of an expected boom in the nascent US wind market in coming years.
The US is looking to shift away from reliance on fossil fuels in power generation. President Joe Biden last week announced a target to halve the country’s greenhouse gas emissions by 2030.
Biden has proposed adopting a national “clean energy standard” that would force generators to fully decarbonise power production by 2035.
BP’s European rivals Royal Dutch Shell and Total have developed their retail power business in recent years as they look to develop services along the electricity supply chain — from electric vehicle charging to smart meters for residential customers.
BP declined to comment on the regulatory filing.