The BP share price went on a three-day gaining streak after announcing that it bought real estate and technology startup Blueprint Power on 7 October.
The deal is part of the oil major’s renewable energy transformation and will allow BP to tap into Blueprint Power’s technology, which aims to turn buildings into virtual power plants by connecting them to energy markets through cloud-based software.
According to BP and Blueprint, the technology can turn an ordinary commercial building into a “flexible power asset”, which can generate, store and trade renewable energy, helping to decarbonise dense urban areas. It can also help property owners to generate new revenue streams and reduce carbon emissions.
Re-energising the BP share price
The BP share price reacted well to the news, with its price rising from 341.55p at the close on 6 October, the day before the announcement, to 360.30p on 11 October, marking a three-day increase of 5.5%.
No financial details were disclosed about the deal, but Blueprint Power will join BP’s “scale-up factory”, Launchpad, with plans to launch in “several major US urban power markets”, according to a BP statement.
The company will also explore how Blueprint Power can work with both its regions, cities and solutions business and its trading and shipping arm to lower the cost of renewable energy and support the decarbonisation of both cities and carbon-intensive industries.
“Decarbonising dense urban areas is a key challenge as we work to play our part in realising a net-zero world. Blueprint’s technology can help deliver this critical transformation,” Sam Skerry, senior vice president for BP’s Launchpad, said.
“Buildings hold huge untapped potential to improve energy resilience in an increasingly unpredictable world, and to decarbonise our built environment,” Robyn Beavers, the co-founder and CEO of Blueprint Power, added.
Founded in response to new energy regulations after the Hurricane Sandy blackout in New York, Blueprint Power uses bespoke algorithms to optimise the energy efficiency of buildings and connect them to power markets. This allows commercial building owners to sell surplus energy stored in batteries or power generated on-site from equipment such as solar panels.
The company works with five of New York’s largest commercial real estate owners, which together own more than 100 million square feet of property in the city and generate 13 megawatts of renewable power. BP and Blueprint Power aim to increase this to 36 megawatts by the end of 2022.
BP’s goal to expand its renewable energy capacity
The deal further ramps up BP’s embrace of clean energy. The company aims to invest in and build its renewable energy capacity to 20 gigawatts by 2025 and 50 gigawatts by 2030.
Confidence in reaching that target was lifted in September when BP announced that Anja-Isabel Dotzenrath would become its new executive vice-president to lead the gas and low carbon energy business. Dotzenrath is a former chief executive of RWE Renewables and chief executive of E.ON Climate & Renewables.
“BP confirms its ambitions in renewable energy while showing that it sees a smaller role in the natural gas part of the business going forward,” Giacomo Romeo, energy analyst at Jefferies, wrote in a note, according to Reuters. Jefferies has a hold rating on the BP share price, which, based on MarketBeat, is the consensus among nine analysts.
Amid the rush to cleaner energy and a shortage of natural gas, oil prices have rallied, climbing more than 16% since the start of September, according to the Financial Times.
The price of Brent Crude sat at $83.33 at the close on 12 October and could continue climbing higher after the OPEC+ meeting last week confirmed producers would stick to the current output rather than hike production as demand soars.
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