CLEAN ENERGY AND
LOW CARBON INITIATIVES

The oil and gas majors are only just starting to sow the seeds for the radical changes that lie ahead by gradually increasing their exposure to renewables and other clean technologies.

Some analysts predict that the oil & gas industry can increase its investment in energy transition technologies up to $31bln per annum by 2030.

Here we review the investment initiatives of some of the major oil & gas companies in renewable energy projects

BP

Set a new ambition to become a net zero company by 2050 or sooner
  • In February 2020, BP has pledged to cut its greenhouse gas emissions to net zero by 2050 or sooner.
  • The commitment is the most ambitious yet from one of the oil and gas industry’s biggest companies.
  • BP has been in the renewable energy business for over 20 years as one of the largest operators among oil majors.
  • Earlier in 2018, BP committed to invest $500 million in low carbon ventures and renewables each year.
  • Diversification efforts have been focused on solar power after the acquisition of Lightsource BP Renewable Energy Investments Ltd. for $200 million.
  • Lightsource BP has doubled the number of countries where it has a presence since December 2017
  • In October 2019, Lightsource BP announced funding for a 200MW solar installation in Australia.
    This will be the largest single plant to be financed by the company in its history and sends a clear signal about its ambitious plans to target growth opportunities in utilities.
  • BP has significant interests in onshore wind energy in the US with 10 sites in seven states.
  • BP has partnered with Tesla to test how effectively wind energy can be stored at the company’s Titan 1 wind energy site in South Dakota.

Shell

Shell plans to spend $1 billion to $2 billion on new energies until 2020
  • Shell plans to spend $1 billion to $2 billion, on average, on new energies until 2020 expanding into not just the solar markets but also wind generation, energy storage and biofuels. 
  • If the company maintains recently proposed short-term emissions targets and gradually increases its investments in non-oil technologies and renewables, it could become the world’s largest power company by 2035.
  • Shell installed more than 10GW of power generating capacity in North America, of which one-third is from renewable resources.
  • Shell has also invested in offshore wind near the Netherlands, acquired First Utility in the UK to supply gas and energy services to domestic consumers, and entered the US supply market through MP2 Energy, while also buying into US and Asian solar power generation through EV vehicle charging and battery technology.

Total

Total has committed to having 20% of assets in renewables by 2030
  • Total has committed to having 20% of assets in renewables by 2030 in line with the company’s strategic mission to become a global integrated leader in solar.
  • The company plans to invest $1.5-$2 billion annually in low-carbon electricity with a target of around 10 GW of installed capacity by 2022.
  • To date, Total has invested around $160m in 20 cleantech startups across its core markets, including businesses in the lithium-ion battery, microbial fuel and sugar energy recovery spheres, and in 2016, it acquired French battery firm Saft for $1bn. 
  • As for renewable energy, the firm is part of several clean energy partnerships, including with Abu Dhabi’s Shams1 solar thermal plant, US-based renewables firm Sunpower and Belgian company EREN Renewable Energy.
  • Total is also investing heavily in energy storage, and earmarks 10% of its annual R&D spending for lithium-ion battery schemes.

Equinor

Equinor aims to reduce the net carbon intensity by 50% by 2050
  • Equinor aims to reduce the net carbon intensity, from initial production to final consumption, of energy produced by at least 50% by 2050.
  • In February 2020, Equinor committed to growing renewable energy capacity tenfold by 2026, developing as a global offshore wind major.
  • Equinor is a leader in carbon capture and storage through work at Sleipner field.
  • By 2025, Equinor expects low-carbon energy solutions and energy efficiency products to account for 25% of its R&D funding, with renewables set to account for a further 15-25%. 
  • Equinor has been involved in offshore wind projects for over ten years and has invested $2.3bn in the sector to date, but began its foray into solar somewhat later, with an agreement to acquire a 40% share of the 162MW Apodi solar farm in Brazil.
  • In September 2019, Equinor and its partner SSE were awarded contracts for the world’s biggest offshore wind farm development in the Dogger Bank region with an expected $11 billion in capital investments from 2020-2026.
  • Equinor is also involved with the development of a carbon capture and storage value chain in Norway and a string of smaller-scale hydrogen and geothermal schemes.
  • In order to spur the development of emerging clean energy technologies, the firm launched its $200m Energy Ventures Fund in 2016.

Repsol

Repsol has set an industry leading net-zero carbon dioxide emissions target for 2050
  • In December 2019, Repsol has set an industry leading net-zero carbon dioxide emissions target for 2050 making it the first oil and gas company in the world to assume this ambitious goal.
  • Repsol will increase its targets for low-carbon generation capacity to a total 7.5 gigawatts in Spain and beyond by 2025, double its production of biofuels from vegetable oils, and start producing green hydrogen in its refining business.

Chevron

In 2018, Chevron launched a Future Energy Fund, with an initial commitment of $100m
  • Chevron has invested in five solar projects with a combined 73MW of power capacity to date and fully owns a and a 16.5MW wind farm. It also has an equity stake in a 49MW geothermal joint venture.
  • Chevron has invested in five solar projects with a combined 73MW of power capacity to date and fully owns a and a 16.5MW wind farm. It also has an equity stake in a 49MW geothermal joint venture.
  • Away from renewables, Chevron has invested more than $75m in R&D projects for carbon capture and storage (CCS) over the past 10 years and has funnelled $1.1bn into the Gorgon carbon dioxide injection project and the Quest project in Canada, which both aim to decarbonise fossil fuel extraction and use.
  • In 2018, Chevron launched a Future Energy Fund, with an initial commitment of $100m set aside to invest in breakthrough technologies that will reduce carbon emissions and provide cleaner energy.

ADNOC

The company announced its plans to lower its greenhouse gas emissions intensity by 25%
  • In January 2020, Abu Dhabi National Oil Company adopted new sustainability goals to become a low-carbon intensive energy company. The company announced its plans to lower its greenhouse gas emissions intensity by 25% by 2030 and limit freshwater consumption to below 0.5% of total water use.
  • The company also plans to plant 10 million mangrove seedlings in the Al Dhafra region of Abu Dhabi by the end of 2022.
  • The company also plans to scale up its carbon capture, utilisation and storage programme, from 800,000 tonnes of captured CO2 annually to 5 million tonnes by 2030.

Eni

By 2022 the company aims to complete 60 clean energy projects
  • In 2019, Eni has set out its plans to achieve net zero carbon emissions by 2030, noting an additional €3bn of investment towards forestry offsets, renewables, circular economy initiatives, energy efficiency, and flaring down projects.
  • In September 2019, Eni has partnered with developer Mainstream Renewable Power as it looked to build up a portfolio of wind, solar and energy storage assets.
  • By 2022 the company aims to complete 60 clean energy projects, investing $1.4 billion in expanding its renewable energy capacity to 2.6GW, up from just 200MW this year. It then plans to almost double its renewable capacity to up to 5GW in total by 2025, while also gearing up its focus on energy storage.
  • In 2014, the company started up the world’s first conversion of a traditional refinery to a biorefinery producing green diesel, green naphtha, liquid petroleum gas, and jet fuel.

Petronas

Petronas is currently focusing on solar and wind power and has established a new division called Gas & New Energy
  • Petronas is currently focusing on solar and wind power and has established a new division called Gas & New Energy, which is aimed at growing a substantial business in delivering clean energy solutions.
  • In 2019, Petronas entered into an agreement with I Squared Capital to acquire a 100% interest in M+, a leading Singapore-based company with a portfolio of distributed, renewable energy assets in Asia.
  • M+ specialises in rooftop and ground-located solar panels. The company currently has over 500MW in capacity in operation or under construction in India, the Middle East and Southeast Asia.