John Browne Chief Executive British Petroleum House Britannic House 1 Finsbury Circus London EC2M 7BA 9th April, 1997 |
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BP Solar became a corporate subsidiary of BP in 1986. According to your 1996 Annual Review BP have invested some $100 million in BP Solar.2 This investment has resulted in manufacturing and assembly plants being developed in Spain, Australia, America, India, Saudi Arabia and Thailand. According to industry analysts, as of the end of 1995, BP Solar was the third largest solar company in the world, employing some 500 staff world-wide with 10% of the global market and sales for 1995 of some $47.8 million.3
However, the vast majority of BP Solar's business activities are taking place outside the UK. This is symbolised by a decision made late last year to invest $7 million in a solar manufacturing plant in California. Greenpeace has estimated that BP Solar manufactured some 100,000 solar panels in 1995. As far as we are aware not one of these solar panels was made in Britain as all of BP manufacturing and assembly plants are based overseas. Greenpeace have also calculated that at most only 1% of BP Solar's production was actually sold in the UK.
One of your colleagues, John Harford, has offered a public explanation for this lack of development of solar power in the UK which is effectively blocking further market expansion of BP Solar's operations. Writing in the November/December edition of Environment Business Magazine he states;
'There are some really far-sighted programmes in PV systems taking place in other countries but here we are stuck in a short-term view of energy. Eventually that will have to change..............Those governments developing supportive and well-integrated PV programmes will greatly enhance the position of the domestic industry and enhance their share of world trade in PV products.' 4
BP's decision to expand oil exploration and production on the Atlantic Frontier is not just a classic example of 'a short-term view of energy' but is also a serious threat to the climate.
The inherently 'risky' European Union (EU) climate change target of avoiding global average temperature increases of beyond 2 degrees Celsius above pre-industrial levels provides a useful illustration of how environmental limits of the worlds' atmosphere has profound implications for the fossil fuel industry. This temperature was defined by United Nations Environment Programme as 'an upper limit beyond which the the risks of grave damage to ecosystems and of non-linear responses are expected to increase rapidly'.
This effectively sets a carbon budget on the world. Taking the EU's 2 degree limit and assuming that, in the best case scenario, the climate is less sensitive to the effects of CO2, the total carbon budget can be calculated as 585 billion tonnes of carbon. This carbon budget allows the world to burn only half the fossil fuel reserves already identified. If we want to set lower limits, or the climate is more sensitive to CO2 forcing, the proportion of fossil fuels that can be burnt is very much lower. The inescapable conclusion of this climate logic is that the overiding need is to ensure that most oil, coal and gas remain below the ground, and to rapidly increase investment in the alternatives to fossil fuels.
BP has so far invested some £826 million in the development of Foinaven.5 This one development has already cost more than 12 times as much as BP have invested in the ten year history of BP Solar. Greenpeace has calculated that if the £826 million spent so far on Foinaven had been used for solar in UK it could have solarised some 100,000 homes. BP clearly gives priority to investing in new UK oil production rather than opening solar factories in Britain and developing a solar market for Britain. These misplaced priorities are symbolised by BP's apparent failure to install any of its own solar panels on its UK offices.
Greenpeace is today offering you twenty five of your own solar panels by way of a gift. These are currently being installed on the roof of BP Exploration's office in Aberdeen. The total installed capacity of Greenpeace's solar gift is some 1.5kW. If permanently installed the solar system will generate some 1,125 kWh of electricity a year. Over the course of its lifetime the solar system, installed by Greenpeace today, will generate some 34,000 kWh of pollution-free electricity and prevent the emission of some 23 tonnes of carbon dioxide. Greenpeace is willing at a later date to permanently connect the solar facade to the electricity supply of BP Exploration's office in Aberdeen thus enabling the building to generate clean electricity throughout the year .
As well as providing BP with a solar gift Greenpeace is today challenging BP to stop production and exploration for new oil in the Atlantic Ocean and to immediately invest £100 million in BP Solar to expand its UK operations. This should be targeted towards rapidly expanding BP Solar's production capacity through the construction of new British solar factories and developing a solar market for the UK. This level of investment will ensure BP Solar's continued status as a world leading solar company as well as generating new and long-term British jobs.
As you know BP Solar is a full member of the British Photovoltaic Association (UKPVA). In February 1997 the UKPVA published a summary of their strategy document entitled 'Photovoltaics: A Growth Industry for Britain'.
BP Solar and the rest of the British solar industry have set out that a £100 million investment from industry, combined with a Government investment of £18 million a year up to 2010, will generate major economic and environmental benefits. It would create 40,000 new British jobs and increase Britain's share of the world solar market from 9% to 15%. This would result in annual sales of £750 million per year.6
Furthermore, this level of investment is necessary to enable BP Solar to increase its manufacturing capacity, reduce the costs of the technology and maintain its status as a leading solar company. Increasing manufacturing capacity is critical to ensure BP Solar's share of the rapidly expanding global market for solar estimated to be worth some £5 billion a year by 2010.7
Kyocera, Japan's leading solar manufacturer, and a major competitor to BP Solar, has taken the lead and has recently announced plans to make significant levels of investment in new solar production capacity in Japan. Strategies Unlimited, the leading industry analysts, have identified the threat that Kyocera now poses to BP Solar's market position:
'Kyocera could challenge BP Solar over the next few years and possibly reclaim its position as the number three manufacturer in the world.' 8
Kyocera will be investing $122 million in new production facilities over the next three years, resulting in a five-fold increase in their production capacity. This will result in Kyocera manufacturing around eight times more solar panels than BP Solar shipped in 1995.9 It will also result in Kyocera employing some 2,500 staff; five times the 1995 level for BP Solar. Kyocera have also announced that by the year 2000 it intends to obtain an annual turnover of $500 million per year; ten times greater than that achieved by BP Solar in financial year 1995. 10
Investment in BP Solar in the UK now would also send a strong signal for the next Government to play their part and commit to the modest level of finance needed to guarantee the rapid development of a solar market throughout Britain. Joint action by BP and the new Government can secure new solar factories in the UK, generate thousands of new British jobs and deliver clean affordable solar power to thousands of homes and offices throughout Britain.
I hope you will not only accept our solar gift, but also make the vital investments in BP Solar that I have set out in this letter.
Yours sincerely,
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Executive Director
Greenpeace
References
1. 'A new frontier for Britain' - Why BP is backing the Atlantic Frontier Project
2. BP Annual Review 1996, page 17
3. Strategies Unlimited, '1996 Photovoltaic Industry Competition Analysis, Report PC-10, November, 1996
4. John Hartford, Planning Manager, BP Solar, Environment Business MAgazine, November/December, 1996
5. The Shetland News, 15th March 1997
6. Photovoltaics: A Growth Industry for Britain (Executive Summary) British Photovoltaic Association, February, 1997
7. Photovoltaics: A Growth Industry for Britain (Executive Summary) British Photovoltaic Association, February, 1997
8. Strategies Unlimited, '1996 Photovoltaic Industry Competition Analysis, Report PC-10, November, 1996
9.The Solar Letter, February 14th 1997, Vol 7, No.4 Page 71. Note: Kyocera intend to increase its manufacturing capacity to 12MW by year-end 1997, to double to 25MW shortly after, and to increase it further to 60MW of manufacturing capacity by year 2000. In comparison BP Solar shipped 7.2MW in 1995
10. Strategies Unlimited, '1996 Photovoltaic Industry Competion Analysis, Report PC-10, November, 1996