British oil giant BP has acquired US-based building energy technology firm Blueprint Power.
Born in response to the energy regulatory transformation that emerged after hurricane Sandy in 2012, Blueprint’s technology supports the decarbonization of real estate by turning buildings into a flexible power network by connecting them to energy markets through cloud-based software. Blueprint will join the BP Launchpad portfolio, supporting an ambitious growth plan that will see the team expand to several major US urban power markets. BP will also explore how Blueprint can work with its various departments to lower the cost of renewable energy and support the decarbonization of both cities and carbon-intensive industries.
“Decarbonizing dense urban areas is a key challenge as we work to play our part in realizing a net-zero world. Blueprint’s technology can help deliver this critical transformation. It can help secure access to renewable energy and, importantly, also create new business opportunities for many sectors,” said Sam Skerry, SVP of BP Launchpad & Ventures. “This is exactly the type of company BP wants to scale and scale fast through our bp Launchpad accelerator.”
Blueprint’s innovative cloud-based software connects building management systems, on-site generators, distributed energy assets, meters, and sensors to track real-time building energy performance. That overarching view helps it keep a building’s overall energy profile within pre-defined limits and can mitigate the demand charges that make up a large portion of commercial real estate utility bills. What makes Blueprint different is their holistic approach, based on the belief that building owners are interested in the overall costs and benefits rather than the complex, multi-vendor, siloed world of building technology.
Much of the credit for Blueprint’s successful holistic model goes to the firm’s CEO and co-founder Robyn Beavers. Beavers has previous experience of grid edge and buildings edge from almost every angle. She led the team that carried out Google’s first big rooftop solar installation back in 2006, she was part of the original founding team of Station A, a unit of NRG Energy, and she led technology investment for Lennar, one of the United States’ biggest homebuilders.
“Joining bp will enable us to maximize our impact on rapidly progressing global energy systems and I’m excited for our team to continue scaling quickly as we become a bp Launchpad portfolio company,” said Robyn Beavers, Blueprint’s founder and CEO. “Buildings hold huge untapped potential to improve energy resilience in an increasingly unpredictable world and to decarbonize our built environment. The time to grow and affect real change is now, and as a bp Launchpad company, we will have the partnerships and opportunities to help buildings make a positive contribution to the energy transition.”
The deal itself was completed quietly with minimal information released. Neither firm disclosed the financial terms of the acquisition, although BP spokesperson Rita Brown suggested that the total price for Blueprint was in the region of “tens of millions” of dollars. Blueprint hasn’t even disclosed its funding since a $3.5 million Series A round in 2018, but Beavers indicated the company has raised between $5 million and $10 million since its founding in 2012. BP, and other oil giants, have been promoting themselves as green energy players with newsworthy solar and wind projects, but this move into the grid edge and buildings is less “sexy” and quite an astute move for both profit and climate change mitigation.
BP was the first oil major to invest significant capital in renewable projects, including wind and solar power as far back as 1980. Formerly known as British Petroleum (BP), the firm rebranded to Beyond Petroleum (BP) in 2001 showing its intention to explore alternative energy sources. However, in the aftermath of the 2010 Deep Water Horizon oil spill incident in the Gulf of Mexico, BP shed most of its green energy investments ($8bn to $10bn) to balance profits, seemingly underlining the public relations purpose of its green energy activity. In recent years, the company has gradually rebuilt its green portfolio but this time focusing on electric vehicles (EV), energy storage, grid-edge, and buildings, as well as some renewable generation.
In 2017, BP acquired a $200m, 43% stake, in Lightsource (now Lightsource BP) Europe’s largest solar power project developer. In 2018, the oil firm made three green investments; a $20m backing of StoreDot - an developer of rapid-charging batteries, a $5m stake in FreeWire - which makes fast-charging infrastructure for electric vehicles, and finally a $160m acquisition of Chargemaster - the UK’s leading network of charging points, which can now be found in BP gas stations. This month’s acquisition of a grid-edge building energy startup, means the dirty old oil company can honestly boast a seemingly well thought out, diversified, and environmentally impactful portfolio of clean energy technology companies.
While dirty fossil fuels have many purposes beyond electricity generation, it does make up a large portion of big oil company revenues. However, renewable energies are now some of the cheapest sources of electricity in most of the world, drawing a growing number of oil companies into the green energy space. Last year, BP set a bold target to boost its renewable energy capacity to 50 gigawatts up from less than 3 gigawatts. Meanwhile, Total Energies aims to have as much as 100 gigawatts of capacity by 2030, Eni is involved in multiple renewable energy projects via partnerships, and Royal Dutch Shell Plc is also growing quickly in the clean energy space. The big US oil firms, ExxonMobil and Chevron, show little interest in going green.
The new focus of oil money on energy efficiency in buildings either suggests that buildings’ influence on climate change is widely recognized enough to boost public relations or that oil companies are now more aware and willing to put their money where it matters. Renewable energy investment is positive too, of course, but every dollar spent on efficiency will return two dollars in reduced energy costs and every kilowatt saved by efficiency is better for the environment than a kilowatt generated by renewable energy that has some carbon footprint.
“Oil majors are progressively positioning themselves for the proclaimed energy transition,” writes Matthias J Pickl, economics professor at King Fahd University of Petroleum and Minerals in Saudi Arabia, in his report The renewable energy strategies of oil majors – From oil to energy. “Oil firms are essentially attempting to figure out how the best presently available cash cow in the world can be replaced for the benefit of their own sustainable future. Furthermore, growing concerns about climate change following the Paris Agreement may provide an additional drive for such a strategy to hedge against hardening investor sentiment towards carbon emissions.”
Big oil’s big money is very welcome in the cleantech industry, especially for buildings that represent almost 40% of energy consumption and greenhouse gas emissions, but we should not get carried away. Despite the fanfare around every green deal, oil majors spent less than 1% of their combined budget on green energy schemes, according to 2018 data, while also extracting, processing, and selling dirty fossil fuels. Green investments still appear to be primarily a public relations exercise for oil companies trying to survive in an increasingly environmentally responsible society, but every new solar panel, wind turbine, and every dollar invested in cleantech gets us closer to our climate change goals.