BP expands wind power footprint in the U.S., sheds unit in India

Sept. 17, 2009 at 3:10 PM
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LONDON, Sept. 17 (UPI) -- BP is expanding its wind power electricity generation capacity in the United States but is shedding an Indian unit, which has been sold to Green Infra Limited of India.

BP said Green Infra Limited purchased its subsidiary, BP Energy India Private Limited, for a total cash-free, debt-free enterprise value of about $95 million. Green Infra Limited is an independent power producer owned by funds managed by India's leading infrastructure-focused private equity company, IDFC Private Equity.

BPEIPL owns and operates three wind farms in India with a total generating capacity of about 100 megawatts. The transaction was completed Wednesday.

BP's decision to sell BPEIPL stemmed from a strategic review in 2008 that shifted focus on developing key wind power markets, especially the United States, as part of its future business strategy.

"We estimate that if 10 percent of the world's power came from wind, it would cut CO2 emissions by one billion tons per year," BP said.

The challenge, however, is to expand wind operations to form a material business that can own and operate gigawatts of installed power.

David Nicholas, a BP spokesman, told United Press International the company currently operates six wind power units in the United States and has begun construction of two more this year.

The electricity-generating wind farms include Cedar Creek, Colo., of which BP owns 33 percent and runs in partnership with Babcock & Brown. The wind farm has a gross capacity of 300 megawatts.

The Edom Hills wind farm in California has a gross capacity of 20 megawatts and is wholly owned by BP.

Other wind farms operated by BP include Sherbino Phase I, Texas, which has a gross capacity of 150 megawatts and runs in partnership with Padoma Wind (NRG). BP has a 50 percent stake in the unit.

BP owns 50 percent of Flat Ridge Phase 1, Kansas, which has gross capacity of 100 megawatts and runs with partner Westar Energy.

Silver Star Phase 1, Texas, with a gross capacity of 60 megawatts, is owned 85 percent by BP and is operated in partnership with Clipper Wind.

Fowler Ridge Phase 1 in Indiana has a gross capacity of 400 megawatts and is owned 62 percent by BP and operated jointly with partner Dominion.

At the end of the second quarter of this year, BP's total net wind capacity was 678 megawatts, including about 100 megawatts from the Indian wind projects and about 30 megawatts from two small installations at a BP refinery and oil terminal in the Netherlands.

The two new wholly owned projects being built in the United States will start producing electricity early next year at Titan in South Dakota, 25 megawatts, BP 100 percent, and Fowler Ridge Phase II, Indiana, at 200 megawatts, Nicholas said.

Following the 2008 strategic review, BP decided to concentrate its global wind development activities on its portfolio of onshore wind development projects and opportunities that it had built up across the United States, Nicholas said.

BP has been building a wind business in the United States with interests in more than 1,000 megawatts of installed gross generating capacity and more than 1,000 megawatts gross capacity at an advanced stage of development. The company says its U.S. wind energy portfolio contains almost 100 projects, with a total potential generating capacity of up to 20,000 megawatts.

BP is one of the largest integrated oil companies in the world, with revenues of $361 billion in 2008.

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