BP plc (ADR)(NYSE:BP) is mulling plans to upgrade as many as 200 of its wind turbines in the United States, Bloomberg reported. The energy giant is looking to update the aging equipment with newer, higher-capacity equipment in a bid to improve efficiency and reliability while increasing overall energy output.
BP is expected to make a decision by mid-year. The project would represent about 400 megawatts of capacity, according to the publication. The updates would include replacing equipment such as gearboxes, drive trains and blades while keeping existing towers and foundations.
BP Wind Energy CEO Laura Folse said that the project would allow the energy company to capitalize on production tax credits while optimizing operations at wind facilities in Texas and Kansas.
“It’s not a done deal, but it is very real,” Folse was quoted as saying by Bloomberg. “The newer technology and the improvements make it economic.”
BP operates 14 onshore wind farms in the United States. The wind farms, located everywhere from the Hawaiian island of Maui to the green hills of northeast Pennsylvania, have a generating capacity of 2,259 megawatts, enough to power all the homes in a city the size of Philadelphia.
BP directly operates 13 wind farms in Colorado, Idaho, Indiana, Kansas, Pennsylvania, South Dakota and Texas. It holds an interest in a wind facility in Hawaii.
BP made an investment at the end of the last year that gives it the option to buy replacement equipment for about 200 wind turbines and still qualify for the full production tax credit, worth 2.3 cents per kilowatt hour of electricity over the next 10 years.
BP Narrows 2016 Loss
Meanwhile, BP reported financial results for the fourth quarter of 2016 and full-year 2016 last year.
The company reported fourth-quarter profit of $72 million, versus a loss of $2.2 billion million for the same period in 2015, thanks to higher oil prices.
For full-year 2016, the oil giant posted a loss of $999 million, a significant drop from a loss of $5.2 billion for 2015.
“Both periods were impacted by charges associated with the Deepwater Horizon accident and oil spill following the settlement of federal, state and local government claims in 2015 and additional provisions this year when a reliable estimate of the remaining material liabilities was determined,” the company said in a statement.
In addition, BP declared a quarterly dividend of 10.00 cents per ordinary share ($0.600 per ADS). The dividend is expected to be paid on March 31.
For full-year 2017, the energy giant expects its underlying production to be higher than 2016. It also expects the first-quarter 2017 reported production to be higher than the fourth quarter 2016, reflecting the impact of the Abu Dhabi concession renewal.
Shares of BP plc (ADR)(NYSE:BP) are down nearly 11% year to date. However, during the past 12 months, the stock has gained nearly 12%.