In just two years, Europe's oil and gas majors have doubled their planned spending on low-carbon energy-from 10 percent of capex in 2019 to 25 percent of overall spending per current expenditure plans, Wood Mackenzie said on Thursday.
In 2019, the European majors were targeting on average $2 billion each per year invested in alternative energy sources, or 10 percent of capex. In 2021, those companies now shoot for $4 billion annual investment on average in clean energy, or 25 percent of capex on average.
Spain's Repsol has the most aggressive target of investment in low-carbon energy-at 35 percent of its total annual spending, Tom Ellacott and Greig Aitken of WoodMac's Corporate Research team said.
Most European majors target renewables, especially solar, onshore and offshore wind, as those technologies are already commercial and scalable and can give Big Oil the exposure to low-carbon energy they seek, according to WoodMac's experts.
Apart from the doubled investments in clean energy, a major difference from 2019 is that U.S. supermajors, ExxonMobil and Chevron, have also pledged investments in low-carbon energy, WoodMac notes.
The U.S. giants are betting on renewable fuels and carbon capture and storage (CCS) projects, but they are steering clear of solar and wind.
In Europe, BP, Shell, Eni, Equinor, and TotalEnergies boost investments in renewable energy generation, EV charging networks, hydrogen, and CCS. In the offshore wind sector, oil and gas majors say they have the capabilities and skills of their legacy business to develop offshore wind. All of those companies have submitted bids for the major ScotWind offshore wind tender in Scotland.
Equinor and Eni, together with SSE Renewables, are developing the Dogger Bank Wind Farm off northeast England, the world's largest offshore wind farm, which will be capable of powering 6 million homes.
"The Majors are on a mission to reshape and futureproof the business. The commitment to new energy and low carbon is a long-term bet on an irreversible shift in the energy mix. And they need to do it now to stay investible," Wood Mackenzie says.
By Tsvetana Paraskova for Oilprice.com
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Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews. More