BP, the British energy giant, is planning to sell its stake in a major solar power project in New South Wales, according to media reports.
The move comes as part of BP's decision to pull out of the solar power market and wind down its solar arm, BP Solar.
In an internal memo leaked to the media, BP Solar's chief executive, Mike Petrucci, said the economics of solar power no longer made sense for the business.
"The continuing global economic challenges have significantly impacted the solar industry, making it difficult to sustain long-term returns," he said.
BP's decision will not come as a huge surprise to industry watchers, as it follows decisions to pull out of a number of solar power projects in Europe, the US and here in Australia over the past three years. BP also said in July that it would stop manufacturing solar products.
BP Solar, along with its consortium partners, Fotowatio Renewable Ventures and Pacific Hydro, won the tender to develop the Moree Solar Farm in June. It will be Australia's first utility-scale solar PV facility and has been described as the country's flagship solar power project, with construction work due to commence early next year.
Once complete, it will become one of the world's largest solar PV generation facilities and will provide power for the Australian grid for 25 years. It will feature 650,000 PV panels and will power 45,000 homes.
When it won the tender, BP Solar predicted that the project would pave the way for solar power to play a central role in Australia's transition to a low carbon economy.
In its most recent update, the Moree Solar Farm consortium said the project was progressing well, with meetings taking place in the local community and positive headway being made on the design and grid connection work.
According to the Financial Times, BP will now look to sell its stake in the project. It will also divest its shares in the consortium building a 32MW solar power project at the US Department for Energy's Brookhaven National Laboratory.
Solar power will play an important role in helping Australia reduce its reliance on fossil fuels. The government pushed through its controversial climate change legislation earlier this year and is keen to subsidise renewable energy. The federal government's Solar Flagships Programme will provide financial support to the tune of $1.5 billion to fund solar power projects around Australia.
Posted by Mike Peacock – solar correspondent