GlobalData’s latest thematic report, ‘Renewable Power in Oil and Gas’ provides an outlook for renewable power technologies around the world along with the role played by leading oil and gas companies in this domain.
GlobalData expects global power demand to grow at a CAGR of 2.5% during the next ten years, a significant portion of which is expected to be fulfilled by renewable power generation. Within the renewable power sector, solar and wind energy are expected to show the highest growth rates in the next ten years. Solar power generation, including solar photovoltaic (PV) and solar thermal, is expected to grow at a CAGR of 11.9% between 2020 and 2030. While onshore and offshore wind power generation are expected to collectively grow at a CAGR of 9.4% over the same period.
A key driver enabling the transition to renewable power is falling cost. Traditionally, renewable power projects had a significant cost disadvantage over coal and gas-fired power plants. However, in recent years, their economic competitiveness has improved significantly due to government policies and incentives as well as technological advances.
Various governments are actively focusing on reducing carbon emissions and have enacted laws to facilitate decarbonisation in their countries. Many oil and gas majors, such as BP, Total, Shell and others, are actively restructuring their businesses to incorporate renewable power capabilities in their portfolio. Prominent oil and gas engineering, procurement and construction (EPC) vendors are also enabling the energy transition drive and have taken up several projects all over the world to build renewable energy infrastructure.
As future oil and gas demand are threatened by efforts to decarbonise the global energy sector, many industry participants are making strategic shifts into the growing renewable power sector. Oil and gas majors are actively investing in solar and wind energy for both captive and commercial power generation. For instance, in January 2021, BP acquired 50% stake in Empire Wind and Beacon wind projects in the US from Equinor for $1.1bn. Electrification, based on renewable energy sources, is an ideal approach to reduce carbon emissions. It also marks a strategic shift away from fossil fuels in the global effort to mitigate the threat of climate change.