Investorideas.com (www.investorideas.com newswire) releases commentary on oil and gas companies’ renewable energy ambitions from GlobalData, a trusted platform for investment ideas including energy stocks.
Global electricity generation is experiencing a significant shift towards renewable sources, leading to a gradual decline in dependence on fossil fuels. Over the past decade, global electricity production has increased by nearly 30%, and during that period, renewable energy has nearly doubled. The share of renewable energy in global electricity generation is expected to exceed 40% by 2030, an important achievement in global climate change efforts. However, according to leading intelligence and productivity platform GlobalData, oil and gas companies are expected to remain cautious about renewable energy investments even as they move toward reaching their renewable targets.
GlobalData’s Strategic Intelligence Report, “Renewable Energy in Oil and Gas” shows that renewable energy production was 7.4PWh in 2020, and is expected to reach 16.1PWh in 2030 at a 10-year compound annual growth rate (CAGR) of 8.1%. The contribution of fossil fuels is expected to decline from 62% in 2020 to 50% in 2030.
Ravindra Puranik, oil and gas analyst at GlobalData, comments:
“Growth in renewable energy development is driven by factors including growing concerns about energy security amid global decarbonization efforts and rising geopolitics. Equipment and installation costs for solar and wind power projects have also declined due to improvements in the underlying technologies as well as economies of scale, reducing the cost of renewable energy to end consumers.”
Oil and gas industry leaders have caught on to this trend and have diversified their energy portfolios to include renewable energy projects. Companies like TotalEnergies are leading the race, with the potential to become one of the world’s largest wind energy producers by the end of the decade if their ambitious project pipeline is realised. BP and Shell are also investing in renewable energy capacity.
Although the pace of renewable investments by oil and gas companies has slowed over the past year – for example, BP recently pulled the Beacon Wind project off New York and Equinor adjusted its targets due to cost challenges – these companies are outperforming their US-based counterparts.
The Puranic concludes:
“The regional policy landscape and financial realities are driving different outcomes for oil and gas companies investing in renewable energy. Supportive regulations and incentives in Europe and Asia are stimulating significant capital flows and project development, while in the US, high costs, regulatory uncertainty and challenging permitting processes have led to delays, halts or cancellations of various renewable initiatives. Despite these obstacles, leading oil and gas companies continue to make progress with major renewable projects where the environment is most favorable.”
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Notes to Editors
- Quotes provided by Ravindra Puranik, Oil & Gas Analyst at GlobalData
- Information based on GlobalData’s thematic report: “Renewables in Oil and Gas”, which evaluates the role of oil and gas players in the renewable energy theme and the efforts of oil majors such as BP, Shell, TotalEnergies, Equinor, Eni in the renewable energy value chain.
- It also identifies key developments impacting the topic and provides an overview of the oil and gas industry’s commitments towards renewable energy adoption.
- This press release was written using data and information derived from proprietary databases, primary and secondary research, and in-house analysis conducted by GlobalData’s team of industry experts.
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