‎“Oil Price”: Major energy companies focus on oil and gas ‎reduces costs of renewable energy projects

Oil Price stated that renewable energy sources are set to benefit from the renewed focus by major oil companies on the oil and gas sector due to the return of major energy companies such as Shell and BP to focus more on this sector due to concerns related to energy security. It may reduce competition and cost pressures in the renewable energy sector

According to Al-Anbaa, she added that despite the huge investments in renewable energy sources, the project budgets have suffered from difficulties during the past two years due to the intensification of competition, in which the major oil companies had a share.

The company considered that this decline by major oil companies may be in the interest of specialized renewable energy development companies, as reduced competition from oil companies could lead to lower project costs and improve profitability in this sector.

Environmentalists and conservationists are preparing their estimates after another international energy company scaled back its renewable development ambitions in just a few months.

It is noteworthy that the renewed focus of major energy companies on profitable projects in the field of oil and gas and the new selective approach to wind energy, solar energy and other clean energy solutions with the best economics, could alleviate competition and cost pressures in the renewable energy industry, as the largest developers complain From high costs, supply chain issues, and the high costs of green projects in government auctions to record levels.

In some detail, Oil Price said that Shell and BP had previously announced their intention to boost investments in oil and gas production and that they would take a “meticulously calculated approach” to projects related to energy solutions and renewable energy.

Both giants have cited energy security and the need to ensure an “orderly transition” in which people get the safe and affordable energy supplies they need, which they currently get from fossil fuels.

Meanwhile, the story of the energy transition, from the perspective of the oil and gas industry, has become part of the “energy trilogy” as BP CEO Bernard Looney puts it — speaking of the need to provide safe and affordable energy when and where it is needed during Increasing investments in renewable energy sources and others

Last February, Looney said, “As the events of the past year have shown, the sudden loss of even a small part of the world’s oil and gas production can have huge economic and social costs, because a reduction in supply without a corresponding reduction in demand will inevitably lead to higher prices.” ».

For their part, the American oil companies Exxon and Chevron announced that they do not plan to invest in wind and solar energy in the future, as their priorities are low-carbon solutions, its capture and storage, in addition to hydrogen and biofuels.

It should be noted that investments in renewable energy sources are setting new records, and the money spent on solar energy worldwide exceeds the value of investments in oil production in 2023 for the first time ever.

But despite these record investments in renewables, project economics have deteriorated in the past two years as a result of increased competition from major oil companies.

Two years ago, Orsted, the Danish company developing offshore wind farms, the largest of its kind in the world, expressed concern that a bigger race by oil companies to enter offshore wind would lead to higher prices for space on the seabed, which could undermine the competitiveness of projects and the speed of technology development.