Oil and gas companies made moves within the wind power sector in 2020, as momentum gathered for a global energy transition. The likes of Shell, BP, Total, Eni, Repsol, Aker Solutions and India’s Oil and Natural Gas Corporation and National Thermal Power Corporation all either bought into wind farms, set up renewable-energy units, raised targets or announced new wind projects this year.
However, it is worth noting that in most cases these companies’ renewable-energy investments make up only a small portion of their total capital expenditure.
They also pale in comparison to the spending plans of more established renewable-energy players. Iberdrola, for example, announced plans in November to invest €75 billion in renewables by 2025. This is more than four times the expected spending of ten oil and gas majors together — including BP, Eni, Repsol, Shell, Total, Chevron and Equinor — in the same period, according to analysis by Rystad Energy published in May.
With newly unveiled plans this year, the fossil fuel sector has since boosted its renewable energy plans.
Shell, along with Dutch power company Eneco, secured the rights to build the subsidy-free Hollandse Kust Noord wind farm in Dutch waters and plans to use its output to produce green hydrogen. The Anglo-Dutch oil major also announced plans to invest in German offshore wind and green hydrogen, and to help Microsoft reduce its carbon footprints.
BP partnered with Ørsted to develop an offshore wind-powered green hydrogen project, announced a deal to supply Microsoft’s data centres with renewable energy, and entered offshore wind with a $1 billion deal to buy into two US projects developed by another oil major moving into renewables, Norway’s Equinor. BP also mapped a global shift from fossil fuels to renewable energy in its annual Energy Outlook report.
This potential for a global shift was reflected by Equinor’s performance in 2020. In the third quarter, the Norwegian company wrote down oil and gas assets worth $2.9 billion while recording increases in profits and electricity generation in its New Energy Solutions unit. It also announced plans to enter Japanese and South Korean offshore wind, and an ambition to become an offshore wind major and grow its renewables fleet tenfold by 2026.
Equinor brought the 2.4GW Dogger Bank wind farm off the UK to financial close along with development partner SSE, before selling a stake to Italian oil firm Eni. The latter plans to submit a joint bid with HitecVision in Norway’s offshore wind tender.