EU Oil Cos Lead Way in Renewable Strategy
European international oil companies (IOC) are leading the way in terms of progressing strategies for renewable power growth, ahead of U.S. players that have not, so far, made the same switch.
That’s according to data and analytics company GlobalData, which made the statement in a note sent to Rigzone recently. According to GlobalData, the top six European firms have over 28 gigawatts (GW) of renewables capacity in the pipeline, with BP, Total and Equinor making up over 70 percent of this.
GlobalData outlined, however, that the scale of these companies’ developments still “lags behind” major power sector incumbents. In a GlobalData chart showing the capacity of upcoming renewables projects for major EU IOCs and power producers, Iberdrola topped the rankings with around 35GW, followed by Enel on around 30GW and Engie near 20GW. BP was the top EU IOC with over 5GW. Equinor and Total ranked a close second and third, respectively, followed by Shell, Repsol and Eni.
‘‘IOCs’ current development portfolios are still significantly smaller in scale than those of incumbents in the power sector,” Will Scargill, a managing oil and gas analyst at GlobalData, said in a company statement.
“However, long-term targets suggest an ambition to make up this ground - with BP’s 2030 target of 50GW significantly exceeding Orsted’s target of 30GW,” he added.
“The rapid build-out of European IOCs’ renewable portfolios is encouraging as they look to position themselves for the energy transition. However, lofty ambitions do come with significant risk - particularly as they will still look to their oil and gas businesses to be the major cash generators through the medium term,” Scargill continued.
The GlobalData representative warned that a weak oil and gas market could leave companies unable to fully fund their renewables growth plans, “leaving them with a diminished position in the overall energy market”.
GlobalData was formed in 2016 following the consolidation of several data and analytics providers. Based in London, the company creates trusted intelligence on the world’s largest industries by leveraging its unique data, expert analysis and innovative solutions, its website states.
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