By 2030, investments in renewable energy (RES) can take up to 20% of the total investment, the world’s largest oil and gas companies. The development of green generation becomes part of their strategies. This is stated in a new report from KPMG, which examined the “Vedomosti”.
In 2018, investment in renewable energy totaled $334 billion, considered in KPMG. The largest investors in green energy industry-with multinationals Shell, Total, ENI, BP and Equinor – they have invested in the industry almost $3 trillion. In 2018, 3-5% of the total investment of these companies was accounted for by renewable energy and related projects, and the companies plan to increase their share.
Experts expect that soon the industry will actively log and large national companies of oil producing countries. So, the Algerian state company Sonatrach plans to increase investment in solar energy. Develop a green energy plan Asian Pertamina (Indonesia) and Sinopec (China). National company of Oman, PDO said that up to 20% of its revenues in 10 years will be created from new business areas – solar and wind power, and wave energy. KPMG experts have analysed strategies of companies and found that in years 2019-2023 Total plans to invest in renewable energy to $2 billion, or 10-15% of the total planned investment, Shell in 2021-2025, he will invest in renewable energy to $4 billion, or 8% of all investments of the company. Green investments Saudi Aramco will reach $50 billion by 2030, or 1.7% of total investments.
Consumers energy is asking to change the mechanisms to support green generation They predict a decline in electricity demand due to high prices Business
For international oil companies investing in renewables is a way to diversify its business and expand into new markets, according to KPMG. Such projects help them to improve their image and show that is produced byoconnect environmental problems – pollution and global warming. And business diversification allows to reduce the dependence of the shareholder value of the companies on oil prices.
business Diversification – a significant part of the strategies of many global oil and gas corporations, I agree the head of “electric power industry” energy Centre of Moscow school of management SKOLKOVO Alexei Khokhlov. This is largely a response to the climate agenda, lead to changes in the priorities of regulators, consumers and investors, he said.
Russian oil and gas company has just begun to develop this area of business. In 2018 the share of renewable energy in Russia amounted to about 0.4%, or 1 GW (in the world – 1449 GW). Major Russian oil and gas companies are beginning to include renewable energy in their strategies. They mainly use renewable energy for its own energy needs, says KPMG. Gazprom in 2017 developed a 13.7 Megawatt hours of green electricity is 8.6% of the total generation, the company “LUKOIL” – 1 MW h, or 5.2%.
“Gazprom Neft” is implementing a project on construction of solar plants at its refineries, a pilot area was Omsk refinery. Strategy of Rosneft until 2022 includes the use of renewable energy sources on remote oil and gas facilities. “LUKOIL” has several wind turbines and is involved in projects for the construction of solar power plants. In “Tatneft” installed a hybrid wind-solar complex with a capacity of 7.8 kW. “Transneft” in 2018, has launched two solar power plants of 250 kW.
Russian oil companies invest more in renewable energy abroad, I think in KPMG. This is due to the higher cost of energy in Europe and a more Mature regulatory environment. For example, “LUKOIL” green power (excluding hydroelectric power stations. — “Vedomosti”) in Europe is almost 10 times greater than Russia’s (of 94.3 MW in Romania and Bulgaria and 10 MW in Russia), say at KPMG.
Lack of interest in Russian oil and gas companies in the development of renewable energy sources in the country due to insufficient support of the market, low profitability of the projects and regulatory barriers, including the ban on combining the generation and transmission of energy (except for own needs), says the Director, strategy & operations group of KPMG in Russia and CIS Maksim Malkov: “it is still possible the participation of Russian oil and gas companies in renewable energy projects abroad, but there is access to the market may be limited to political risks and institutional barriers”.
Russian oil and gas companies are minimally involved in the development of renewable energy in Russia – no one, not involved in the state program of construction 5.5 GW of green capacity until 2024, reminded Ukrainians. For Russian oil companies ‘ main business is more profitable than renewable energy, low-carbon and climate agenda in Russia is not so relevant, says Khokhlov: “But changes in this area is slowly starting to happen, and the Russian oil and gas companies are also beginning to consider their strategies and responses to global trends of decarbonization of energy.”
While some Russian oil and gas companies already have projects in renewable energy, this is the exception rather the rule, says Director of the Association of renewable energy development Alexey Zhikharev: “Renewable energy is still perceived by the majority of traditional energy companies as a threat and, given the low level of implementation of ESG principles, and often a complete lack of practice non-financial reporting incentives for such investments is not enough”. Affect the situation can Russia’s ratification of the Paris agreements and the extension of the program of support of renewable energy up to 2035, said Zhikharev.
the Representatives of “Rosneft”, “Lthe ukoyl” and “Gazprom oil” has not responded to the queries of “Vedomosti”.