‘Good for you’, says BP as it fires up its oil derricks and steps away from its commitment to renewables

On the back of a record breaking year for UK energy derived from renewables, the oil giant BP has confirmed it is scaling back on its renewable projects as it doubles down on efforts to produce oil and gas.?

The oil giant, which froze new wind projects last year, is continuing its reversion towards its core business as a result of lower oil and gas prices and, more to the point, lower profits from its refineries, in what is being touted as a ‘fundamental’ strategy reset.

Profits.?

Last year saw UK homes powered by the cleanest electricity in its history. An analysis by the climate and energy website Carbon Brief found that total electricity generated from clean energy sources reached a record 58 per cent last year. The figure builds on a decade of improvement in the way we source our energy, with the UK more than halving the electricity generated by fossil fuels and doubling the output from renewables. Whether that progress is as fast as you’d like it or not, there’s some cause for celebration right there.?

Cut it any way you like, the fact that last year we produced 124 kilograms of carbon dioxide pollution for each kilowatt hour of electricity we generated is a huge step in the right direction; down more than two-thirds since 2014.?

And while most of us would agree renewable energy is a good thing, there is still one person who cannot be convinced: the energy company shareholder. While the people who will be left having to foot the bill – our children – aren’t listening yet, BP’s investors are watching their share price on an hourly basis. Just like the shareholders at Shell and Equinor, two companies that have already turned their back on their renewables commitments; and investors determine the success or failure of any publicly traded business.?

But ask yourself, How much does an organisation need to make? And if that company is making a tidy profit but still feels the need to forgo virtuous activity in order to compete, then who can deny there’s something rotten with the bigger picture.

In 2019 BP committed to achieving a target of 50GW of electricity generated by renewables over the next 20 years. Five year later, and the company is expected to walk away from this commitment as it pivots back to the crude oil that made its initial investors so rich in the first place, and continuing its new strategy of scaling back on renewables.

The majority of its offshore wind assets were placed in a joint venture with Japan’s Jera at the end of last year, separating them from the company’s core fossil fuel business and helping the company to define its profitability to shareholders when it comes to reporting.

The upshot is that BP, having waved the green flag to its detractors just five years ago, is now expected to halve its commitment to renewables until 2030; a figure of around ￡5bn.

It’s all well and good for individual households to put solar on their roof, or a heat pump in their back garden, but if these giant multinationals can’t stay on course, what good will it do? We’ve improved the costs of extracting and distributing fossil fuels, but the real costs come in when we start burning them.?

Compared with the costs of reparation for landmark events such as the recent fires in Los Angles, the costs of Net Nero will seem very meagre indeed.?

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