BP says that its low-carbon power business is expected to deliver revenues of around $6 billion a year in the next decade, during which time its investment programme could reach $8 billion. BP Alternative Energy, which employs about 2,500 people around the world, is headed by Steve Westwell, Group vice president.
The move builds on the success of BP Solar, which ran at a profit for the first time last year. But although BP Alternative Energy will be based in Sunbury, near Middlesex, little of its investment will be in the UK.
The $1.8 billion planned investment over the next three years will be split roughly equally between four technologies: solar, wind, hydrogen and combined-cycle-gas-turbine (CCGT) power generation.
The company's plans include:
However, the company's strategy has come in for some criticism - notably its attempt to label investment in gas-fired power stations as a low-carbon energy source. Moreover, BP expects to invest $10 billion in each of the next three years in oil and gas exploration and production - suggesting that it is still a long way from delivering on its goal of going "beyond petroleum".
Gaynor Hartnell of the Renewable Energy Association said: "Half of BP Alternative's $1.8 billion planned investment is earmarked for renewables, and this is clearly good news. As things stand, little of it is likely to end up in UK projects, but with the current uncertainties surrounding Government grant programmes for solar this is understandable. The rest is for CCGTs and enhanced oil recovery, and while many would question terming these as 'alternative' or 'green' this should not detract from the fact that an oil major is moving towards a greener portfolio."
Sven Teske, renewable energy campaigner for Greenpeace International, said that "BP's investment is too much to just be a PR gag. On the other hand, it is a small fraction of BP's overall investment and not enough to lead in the renewable energy business." Mr Teske argued that BP could do a lot with geothermal technology and offshore wind because "it has the infrastructure and could use its knowledge of operating oil and gas platforms."