Renewable energy-based power generation is expected to grow at a CAGR of 6.9% between 2022 and 2030. As of 2022, oil and gas companies owned little over 1% of the total installed renewable energy capacity in a market dominated by traditional power producers.
Leading oil and gas companies are expanding their business portfolio with increasing investments in renewable energy. Solar and wind energy have been the primary markets in this transition, as these technologies have promising growth potential. Companies are also increasing their exposure to the budding biopower generation segment.
The share of fossil fuels in the global power mix is expected to decline between 2022 and 2030, whereas the share of solar and wind power is expected to increase during the same period significantly. The costs of equipment procuring and installation in solar and wind power projects have drastically declined in the past decade. This is leading to an overall decline in the levelised costs of renewable energy for the end consumers, thereby making it an attractive market offering.
Emission norms and decarbonisation targets are also driving investments from oil and gas leaders in the renewable energy segment. Going ahead, the industry will increase its adoption of low and zero-carbon sources of energy, solar and wind power. For instance, BP is expected to scale up its yearly investments in low-carbon energy projects in the range of $3bn to $5bn by 2025 and then $4bn to $6bn by 2030. Further details of oil and gas companies’ investments in the renewable energy segment can be found in GlobalData’s new report, ‘Renewable Energy in Oil & Gas’.
