BP puts Australian offshore wind interests into new “capital lite” venture with Japan energy giant

British oil and gas supermajor BP continues its backwards march out of renewable energy investment with the news this week that it will merge its offshore wind business into a new 50:50 joint venture with the renewables arm of Japan’s largest power generation company, Jera Nex.

In a move widely reported as part of efforts to “significantly reduce BP’s anticipated investment into renewables through the rest of this decade”, the new company will be called Jera Nex BP and will start life with a mixture of operating assets and development projects totalling 13GW.

Both companies are committing to a range of assets including around 1GW of existing generating capacity, a development pipeline of around 7.5GW, and further secured leases of around 4.5GW of potential capacity.

Two Australian projects in the mix include the 752MW Blue Mackerel and 600MW Spinifex offshore wind farms proposed for development off the southern coast of Victoria, both of which are part-owned by the Belgian offshore wind outfit, Parkwind, that was last year bought up by Jera Nex.

“We are very pleased to have reached agreement with Jera to form a top five wind developer globally,” said Murray Auchincloss, BP CEO.

“This will be a very strong vehicle to grow into an electrifying world, while maintaining a capital-light model for our shareholders. We very much look forward to combining our strengths in Europe and Asia-Pacific to create another innovative platform.”

The creation of Jera Nex bp builds on a long history of partnership between bp and Jera, along with Jera’s parent companies Tokyo Electric Power Company (TEPCO) and Chubu Electric Power.

And though this history has been built primarily on gas, the companies have recently begun pursuing the potential for cooperation in solar, hydrogen, and low-carbon fuels.

“Offshore wind has significant potential and is a critical component of the energy transition,” said Yukio Kani, global CEO and chair of Jera.

“The sector is at an inflection point, and we believe the transformative partnership launched today between our two companies combines the resources, capabilities, and network necessary to be a world-class offshore wind company.”

Bp, meanwhile, has joined the likes of oil and gas peers Shell and Equinor in doubling down on oil and gas operations in an effort to spike near-term profits for their shareholders.

Shell, for example, signalled last week that it would slow spending on its offshore wind business, confirming soon after to reporters that it would not lead any new offshore wind developments.

The move by BP does raise questions around the recently completed acquisition of renewable energy developer Lightsource – now known as Lightsource BP – in October. BP announced in November last year that it would acquire the remaining 50.03 per cent interest that it did not already own in Lightsource BP.

With the acquisition completed, Lightsource BP expanded its new parent company’s onshore renewable energy portfolio with a 62GW development pipeline and operations spanning 19 global markets.