investments in green energy

Oil Giants Must Abandon Concept of “Business as Usual” and Increase Investments in Green Energy

It seems that a major turnaround in the energy sector is the gradual abandonment of fossil fuels and their replacement with green renewable energy will be impossible without the support of large energy companies, which base their businesses on fossil fuels. It is not disputed that in their strategies they have started the implementation of this process, not only strategically but also with concrete investments and realization of projects.

The big oil companies have accepted the Paris Agreement and its goals, but action is needed to achieve them. According to the strategies, their investments are focused on electric chargers, CO2 reduction, biofuels, and carbon storage. The policy of the big oil companies is to gradually invest in the energy transition. The companies have different investment plans for green projects. For example, Shell invests one billion euros per year. But is that enough? And what is the ratio of investments in renewable energy sources to investments in fossil fuels?

Undoubtedly, the big oil companies are an important component in the energy transition and the speed of realization of this process will largely depend on their role. On the other hand, these companies are large and their role will be important for the process, especially their activities towards the realization of investments in green projects and increasing the amount of these investments.

On the other hand, their moves and direct investments toward projects from renewable energy sources will mean a reduction of investments in fossil fuels. This is exactly the key factor. The reduction of investments in fossil fuels and the increase of investments in green projects is the only and most important indicator for the access and support of the energy transition. This will directly affect the reduction of CO 2 emissions. Creating this balance is extremely important for this process on a realistic basis.

Trends are also in favor of energy transition and renewable energy sources. For example, the number of electric vehicles is 9% of the total cars sold last year. This percentage has a tendency to increase and will increase in the next period. But despite the announcements and strategies, the big oil companies are not giving up on the profits from fossil fuels, especially now when the price of oil is historically high. Obviously, the concept of “business as usual” is the basis for the further position of the big oil companies.

The strategy for investments in renewable energy sources and energy transition has a political dimension and is not enough, but rather serves to meet the demands. The real projects in this direction that are already realized are indisputable, but they are not enough. There is a big difference when comparing investments in green energy and those in fossil fuels.

According to the announcements, by 2030, the largest oil companies will spend over 850 billion euros on new oil and gas fields. This group includes the largest global energy companies including Shell, Exxon, and Gazprom. At the top of the list in terms of investments in new fields is Russian Gazprom with planned investments of over 370 billion euros. Seven other major projects have already been approved. Experts and non-governmental organizations are reacting to this trend, and the Government is also putting pressure on them, which are trying to accelerate the energy transition with their policies.

Kemal Ben Naceur, President of the Association of Petroleum Engineers, underlined that it is necessary to strengthen investments in renewable energy sources at the expense of investments in fossil fuels. He recently stated in his statement that investments in renewable energy sources are not enough and must be accelerated.

De facto, there are several scenarios for achieving the targets for zero emissions by 2050, but it will not happen with partial investments in this process. The big energy companies will have to be more honest in this process and increase investments in renewable sources in the next period. Although this process will not be easy, we need to work on creating political measures that will impose conditions for accelerating this process.

On the other hand, now significantly larger companies that invest in renewable energy sources such as Orsted A / S, Iberdrola SA, JinkoSolar Holding Co. Ltd. (JKS), Vestas Wind Systems A / S, Siemens Gamesa Renewable Energy SA, continue to strengthen their positions in the new global energy market whose map is being drawn. Although from today’s point of view the new market model based on green energy may be viewed with skepticism, innovations in new technologies leave much room for optimism. Especially given the global political support and the need to reduce CO2 emissions, a process for which there is no delay.