BP unveiled plans yesterday to double its investment in alternative and renewable energy sources, saying it will spend $8bn (£4.6bn) over the next decade.
The company, which is promoting its green credentials in a high-profile advertising campaign tagged "beyond petroleum", will create a new business that supplies low-carbon electricity.
BP will focus on four areas: wind power, solar energy, hydrogen and gas-fired power generation. The company also aims to be the leading trader in clean power and carbon dioxide credits.
But Lord Browne of Madingley, the company's chief executive, admitted that BP plans to continue to raise, for years to come, its production of oil and gas. The burning of these hydrocarbon fuels is a central contributor to global warming.
"Of course, what we are announcing today is not an instant, magical transformation of the energy market. It is a very realistic, practical step in a new direction. For the foreseeable future, for decades to come, the world will need hydrocarbons, and we will continue to invest in order to produce and sell oil and gas in the cleanest, most efficient way possible," Lord Browne said.
He said the "beyond petroleum" marketing slogan was not meant in a literal sense. "It is more a way of thinking," he said.
Environmentalists welcomed the BP move, although activists questioned the inclusion of gas-fired power generation in BP's alternative energy business. Tony Juniper, the director of Friends of the Earth, said gas was a conventional technology, so it should not count.
He said: "This is a step in the right direction. But considering the scale of the company, this is still a modest initiative. BP's core business is still the production of fuel from oil, which is one of the main sources of climate change."
BP's $800m-a-year plans for alternative energy compares with next year's total annual investment of some $15bn.
Lord Browne said: "As a long-term business we should begin to look beyond that [hydrocarbons], beyond petroleum - to the energy needs of the world over the next half century. And that is what we are doing, starting today."
BP's solar panel business is already behind only Japan's Sharp and Kyocera. It has two wind farms on company land in continental Europe and it plans to develop many more on BP property, especially in the US where it has a string of plants in the mid-west's "wind belt".
In hydrogen, the company hopes to build the world's first gas power plant in Scotland, where carbon is separated and buried under ground.It also is also developing hydrogen as a fuel for cars and buses.
BP argued that gas power was included in its alternative energy plans because modern combined-cycle-gas-turbine plants are about twice as clean as conventional coal-fired power stations.
Lord Browne said: "Our aim is to become the leading player in alternative energy in the power sector on a global basis and to grow the business five or ten-fold over the next 10 years." The company expects the installed generation capacity of renewable and alternative power to triple by 2020.
Shell, the other UK energy giant, has not laid out its long-term investment plans for renewables, although a spokeswoman said it had the broadest mix of activities in this area, including geothermal and biofuels projects. It is a top 10 player in the solar market and is one of the three leading wind-farm operators in the US. Earlier this year, Shell submitted a planning application to build the world's biggest wind farm, a £1.5bn facility in the Thames estuary area that would create enough power for 750,000 homes.Reuse content