With the transition to clean energy on the rise, the effort that the oil and gas companies are putting in in the smooth switch to renewables is worth noting. Three giant oil firms realign themselves to remain relevant in the energy industry by venturing into the renewable energy programs.
The quantity of renewable energy generated has been growing extensively, with now a capacity exceeding 1500 GW. The International Energy Agency (IEA) anticipates the addition of about 1200 GW of renewable energy worldwide by the end of 2024. This anticipation is in line with the expanding offshore wind energy projects and other solar power programs.
In this transition to renewables, the strategic propeller is the development of objectives and goals by companies that champion for long-term energy systems that are renewable. European countries are fighting hard to adjust their energy sector to transit to renewables. These countries’ effort is visible in the growing focus by their three energy giants to change operations from oil to renewables. These three giants are BP, Shell, and Equinor.
Shell is altering its operations by entering agreements with companies that generate electricity from renewable energy and the energy’s subsequent storage. Shell revealed that it is implementing the net-zero emission regulation by pushing its branches to produce goods and offer services that rely more on renewable energy than oil. In the meantime, the company has a total energy potential of 6.83 GW in renewables, which it will supply to its customers.
Elsewhere, BP is downsizing its oil energy projects as it embarks on expanding the renewable energy portfolio. The company is hopeful that it can dominate the renewable energy industry once it attains maximum potential in this venture. The company estimates to produce about 50 GW of renewable energy from its solar, wind, hydrogen, and biomolecular facilities by 2030. The firm has 12 GW potential of energy from its Lightsource BP project. Additionally, the firm is preparing to downsize its dependence on oil-oriented projects for profits by half. The firm intends to achieve net-zero carbon emissions in the coming three decades aggressively.
Norway’s leading energy supplier, Equinor ASA, is also in the race to shift focus from oil and gas and adopt the eco-friendly renewables. This country obtains close to 100% of its renewable electricity from hydropower. For this reason, Equinor and other energy providers are restraining from the country’s oil and gas reserves by pursuing hydropower, wind, and solar energy. Equinor boasts about 0.5 GW in renewable potential but stated that this quantity would grow to 16 GW in the next fifteen years.
All these three energy pioneers face the same challenge of low-profit margins in this coronavirus pandemic season. This challenge comes along with this year’s declaration of transforming to clean energy companies. To sum up, Shell is still expressing neutrality in its pursuit of other energy alternatives. BP and Equinor are likely to transition completely into renewable energy firms looking at their vast investment in renewable energy projects. Although all three companies are experiencing low gas and oil prices, they must realign themselves to tap into the growing clean energy initiatives to recuperate and regain profits.