Oil major BP has announced plans to double investment in renewable and low-carbon energies in order to create a new low-carbon power business, BP Alternative Energy.

The new business will manage an investment programme in solar, wind, hydrogen and combined-cycle gas turbine (CCGT) power generation, which could deliver revenues of around $8 billion over the next decade.

“Consistent with our strategy, we are determined to add to the choice of available energies for a world concerned about the environment, and we believe we can do so in a way that will yield robust returns,” said BP chief executive Lord Browne.

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.

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. The hydrogen will be used at a 350 MW power station in Peterhead and the carbon dioxide 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 US refinery which would be used to generate 500 MW at an adjacent new-build power plant.

Projected investment in CCGT will be spent mainly in the US where the company already has significant co-generation capacity and is currently finalising plans for a new $400 million, 520 MW scheme at one of its major plants.

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.