LONDON (Reuters) - BP is targeting smaller and wider-ranging investments in renewable energy to avoid large losses in the sector like those it suffered earlier in the decade, Chief Executive Bob Dudley said on Wednesday.
BP and peers including Royal Dutch Shell and Total have recognized the need to reduce carbon emissions in the fight against global warming, but their investment in renewables remains tiny compared to oil and gas.
“We’re making smarter, in many cases, smaller bets, and making more of them across a wider range of technologies and business models,” Dudley said in a speech at the Oil & Money conference.
“Rather than bolting on a whole series of low-carbon businesses, as we have in the past, we’re building low carbon into what we do.”
BP made a number of large investments in solar power, wind farms in the United States, carbon-capturing technology and biofuels in the 2000s under the leadership of John Browne, who sought to rebrand the company as “Beyond Petroleum”.
Some of those investments failed to pan out and BP in 2011 wrote off its solar business.
BP still operates in renewables, including a large onshore wind power business in the United States, but those businesses are not generating much profit, he said.
“We’re thinking beyond petroleum,” Dudley said.
“Our shareholders want to know we are committed and studying this ... We just don’t know the answers yet.”
Within its traditional oil and gas business, BP is also developing low-carbon fuels for ground and air transportation and even ways of reducing carbon in cement, Dudley said.
The London-listed company is considering getting back into solar power, but unlike the previous attempt when it focused on producing panels, this time it wants to integrate solar with gas power generation in specific countries, Dudley said.
“Through these venturing and partnership activities, we are building our understanding so that we can avoid large speculative investments and instead give ourselves as much optionality as possible to back winners as they emerge.”
Dudley reiterated his call for a global price on carbon emissions, which would make cleaner energies, including renewables and gas, more profitable to develop.
“This time the global commitment to action feels different, and the national pledges are a good start. But frankly we need even stronger and clearer signals to create the confidence to invest in and grow low-carbon businesses at scale.”
Reporting by Ron Bousso; Editing by Dale Hudson