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issues commentary on oil and gas companies’ renewable energy ambitions
from GlobalData.
Global power generation is experiencing a significant shift toward
renewable sources, leading to a gradual decline in reliance on
fossil fuels. Over the past decade, global power generation has
increased by roughly 30%, and during that period, renewable energy
has nearly doubled. Renewables are expected to account for more than
40% of the global power generation by 2030, marking a pivotal
achievement in global climate change efforts. However, oil and gas
companies are expected to remain cautious about renewable energy
investments even as they press ahead to reach their renewables
targets, according to GlobalData, a leading intelligence and
productivity platform.
GlobalData’s Strategic Intelligence report, “Renewable Energy in Oil
and Gas,” reveals that renewable power generation in 2020 was 7.4PWh,
and it 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:
“Rise in renewables development are influenced by factors,
including global decarbonization efforts and rising concerns about
energy security amid intensifying geopolitics. The cost of
equipment and installation for solar and wind power projects has
also declined due to improvements in underlying technologies as
well as economies of scale, leading to lower levelized costs of
renewable energy for the end-consumers.”
Oil and gas industry leaders have caught on to the trend and
diversified their energy portfolios to include renewable energy
projects. Companies like TotalEnergies are among the frontrunners,
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 realized. BP and Shell are also investing in renewable
power capacity.
Although the pace of renewables investment by oil and gas companies
has moderated over the past year – with BP, for example, recently
pulling out of its Beacon Wind project offshore New York and Equinor
adjusting its targets due to cost challenges – these companies
continue to outperform their US-based counterparts.
Puranik concludes:
“Regional policy landscapes and financial realities are driving
divergent outcomes for oil and gas companies investing in
renewables. Supportive regulations and incentives in Europe and
Asia are encouraging significant capital flows and project
development, while in the US, high costs, regulatory uncertainty,
and challenging permitting processes have triggered delays,
pauses, or cancellations for various renewable initiatives.
Despite these obstacles, leading oil and gas companies continue to
progress with flagship 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: “Renewable
Energy in Oil and Gas,” which evaluates the role of oil and gas
players in the renewable energy theme and further benchmarks
efforts of oil majors, such as BP, Shell, TotalEnergies, Equinor,
Eni, in the renewable energy value chain. -
It also identifies the key developments influencing this theme and
provides an outlook of oil and gas industry commitments towards
renewable energy adoption. -
This press release was written using data and information sourced
from proprietary databases, primary and secondary research, and
in-house analysis conducted by GlobalData’s team of industry
experts.
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