British energy giant BP has reached an agreement with independent US solar developer 7X Energy to purchase 9 gigawatts (GW) of solar development projects for $220 million, BP announced Tuesday.
In a statement, the company said the acquisition is a significant step towards its target of growing its net developed renewable generating capacity to 20 GW by 2025 and to 50 GW by 2030.
The projects are expected to meet BP’s low carbon investment criteria, generating returns of at least 8-10%.
The deal will also expand BP’s renewables pipeline from 14 GW to 23 GW in the projects that are spread across 12 US states, with the largest portfolios in Texas and the Midwest.
“The assets will be developed through BP’s 50-50 solar joint venture Lightsource BP, a global leader in solar energy, applying Lightsource BP’s capabilities to accelerate BP’s renewables targets,” it said.
Once developed, these projects will have the capacity to generate enough clean energy to power around 1.7 million US homes. The development is also expected to support thousands of jobs through construction.
BP will pay 7X Energy $220 million for the projects and 1 GW of “safe harbor” equipment and expects the acquisition to complete in 30 days.
BP’s executive vice president of gas and low carbon energy, Dev Sanyal, said the deal was expected to bring 9 GW of high-quality solar projects into markets.
“This is a significant step as we continue to deliver on our net zero ambition,” he said.
Assets with a combined generating capacity of 2.2 GW are expected to reach a final investment decision by 2025, with the remaining progressing by 2030.
By Sibel Morrow