Energy

Oil companies and investors are shifting their support to renewables 

The giant oil companies are cashing their support into renewable energy projects to remain in business in the new renewable energy era. Various company heads like Marco Dunand of Mercuria and Torbjorn Tornqvist of Gunvor stated that they would be investing in renewables to recover profits from the conventional energy plans’ upcoming clearance. The investors hope that this move can help them retrieve earnings that they have lost in the transition from fossil fuels to renewables.

Dunand explained to FT Commodities Global Summit that the mega oil companies must move to renewable energy to remain a going concern in the upcoming decades. He added that the Paris agreement on climate change calls for this inevitable transition. Dunand stated that giant oil companies are under siege to switch to solar, wind, and hydrogen quickly. He noted that there would be an increase in renewable energy projects in the next half-decade if more investors venture into renewables.

Other giant oil companies trusting this new venture are Vitol and Trafigura. BP has already started buying renewable energy projects that will be its new operation once the ICE cars and fossil fuel systems get substitute renewable energy sources. However, Tornqvist argues that achieving net-zero emissions is unachievable since the areas where fossil fuels and resources gain usage is vast. He thinks that society will not readily uptake renewables since most of them use ICE cars and their energy demands are high.

Vitol’s head, Russell Hardy, stated that they would be supplying 500 megawatts of renewable energy once the projects they acquired start operating. On the other hand, Trafigura reported that it would be developing solar, wind, and thermal energy storage projects in the coming years with $2 billion investments. The projects will help develop renewable energy infrastructure.

Experts argue that oil companies have to reason to transition to renewables to remain in the market. The investors think that profits in renewable energy projects will be low since most consumers are skeptical of purchasing resources. Consumers are adamant about switching to electric vehicles, which use this energy to fear the cars not meeting their travel needs.

Finally, with the transition to renewables, Trafigura’s chief of operations stated that the oil prices would not rise to a higher level cheating the oil companies not to invest in renewables. The investments in renewables are growing, showing that investors have accepted the new changes.

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