BP last week said that it plans to double its investment in alternative and renewable energies to create a new low-carbon power business with the growth potential to deliver revenues of around $6 billion a year within the next decade.

BP Alternative Energy will manage an investment program in solar, wind, hydrogen and combined cycle gas turbine (CCGT) power generation, which could amount to $8 billion over the next ten years. The move builds on the success of BP Solar, which expects to hit revenues of $1 billion in 2008, BP said.

BP chief executive John Browne said the first phase of investment would total some $1.8 billion over the next three years, spread in broadly equal proportions between solar, wind, hydrogen and CCGT power generation. Investment will be made step by step, and will depend on the nature of opportunities and their profitability.

“We are focusing our investment in alternatives and renewables on power generation because it accounts for over 40% of man-made greenhouse gas emissions, the biggest single source,” he said. “It is also the area where technology can be applied most cost-effectively to reduce emissions. As the pricing of carbon develops through trading schemes and other initiatives, the market will grow rapidly as low-emission technologies displace less clean forms of power generation.”

Investment in solar over the next three years is planned to boost BP’s leading position as a leading manufacturer and supplier of photovoltaic systems. In a field where technology improvements and higher productivity are causing costs to decline, BP said it currently has 10% of the global market, which is growing at 30% a year, faster than any other form of renewable energy.

BP currently has more than 100 MW of solar manufacturing capacity in the U.S., Spain, India and Australia, with a plan to double its capacity before the end of next year. BP recently signed a strategic joint venture to access China’s expanding solar market and provide local manufacturing capacity and is exploring similar opportunities elsewhere in the region.

Investment in hydrogen fuels will include the world’s first commercial project — at Peterhead, in Scotland — to turn natural gas into hydrogen by stripping out carbon dioxide and pumping it into depleted oil reservoirs.

The hydrogen will be used at a power station in Peterhead to generate 350 MW of “clean” electricity, and the carbon dioxide will be re-injected into the offshore Miller field. BP is looking at a similar sequestration scheme to make hydrogen from low-value coke by-products at a U.S. refinery, which would be used to generate 500 MW at an adjacent new-build power plant.

Investment projected for wind represents a significant step up in this area of power generation for BP, the company said. BP currently runs two wind farms alongside existing oil plants in the Netherlands. It also owns industrial land in open, high-wind regions of the U.S., away from residential areas, providing the possibility to build the first large-scale U.S. wind farm generating up to 200 MW in 2007. The company has identified enough U.S. sites to accommodate wind turbines with a total capacity of 2,000 MW.

Projected investment in CCGT will be spent mainly in the U.S. where the company already has significant co-generation capacity and is currently finalizing plans for a new $400 million scheme at one of its major plants that will deliver 100 MW of power to the plant and 420 MW to the local electricity grid.

BP Alternative Energy will be based in Sunbury, Middlesex and initially employ some 2,500 people around the world. It will be headed by Steve Westwell, reporting to Vivienne Cox, chief executive of BP’s Gas, Power & Renewables division.

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