Gathering under the banner of a slogan of “cooperation for a sustainable future”, members of the powerful Organization of the Petroleum Exporting Countries (OPEC) stressed the importance of ensuring reliable energy supplies as a means of helping achieve the UN-led sustainable development goals, during an international forum in Vienna on June 20. Although it's a club of oil-led economies, OPEC is keen to show it is embracing energy diversification and sustainability – and that includes making plenty of room for renewables in the global energy paradigm.

Goal seven of the 17 sustainable development goals adopted by the UN in 2015 is the achievement of affordable and clean energy for all. 

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Traditional energy sources still have a central role to play, of course, said Prince Abdulaziz bin Salman, Saudi Arabia’s minister of state for energy affairs, who heralded the end of a “long period of under-investment” in the sector. “[Petroleum] will continue to be a bedrock of the energy-security future. We will do everything needed to ensure long-term stability and energy supply,” he said. 

But there was agreement from many of the speakers – who included energy ministers from OPEC member states as well as the chief executives of the world’s largest international oil companies – that other sources such as natural gas and renewables need continued investment in order to meet long-term energy demand. 

While blaming “illegitimate sanctions” such as those targeted at his country, and other “artificial devices” that constrain energy supply, Russia’s deputy energy minister Alexey Texler joined the chorus of other OPEC members in acknowledging the importance of renewable energy in maintaining stable energy supplies. 

“Ensuring further implementation of the sustainable development goals requires a deeper dialogue [on energy supply]. We need to remove excessive barriers and also search for cleaner sources in order to have adequate energy supply for the future,” said Mr Texler. “The share of hydrocarbons in the world energy mix will decline over the next few decades but the demand for energy will only grow.” 

Energy companies are putting an increased focus on renewables. Though data service fDi Markets reveals that crossborder greenfield investment in renewable energy has declined each year since 2015, both in terms of capital volumes and numbers of projects, it has edged closer to FDI volumes in coal, oil and natural gas as investment in traditional industry declined until recently. From 2008 to 2013, greenfield FDI in renewables was half that of fossil fuels, but from 2013 to 2018 so far, it was only a third less. 

The sub-sector driving the most FDI in recent years has been solar, according to fDi Markets. This fits with energy giant BP’s strategy, group CEO Bob Dudley told fDi. “We’re looking at solar now in places from India to the US, to the UK, Algeria, Egypt and Trinidad, and it’s got a bright future. We’ve invested in Light Source BP, which is Europe’s biggest developer. We’re managing our portfolio through this [energy] transition well and spending a lot on research and development,” he said.

The company is also investing in biofuels and wind energy and has about 8000 employees working in its renewables units. 

As to how countries can spur investment in their renewable sectors, over-reliance on incentives has proved a volatile, if initially necessary, tactic that the industry is moving on from. “Broadly we like business models that don’t require subsidies that can be pulled back. But also broadly subsidies and incentives have helped support this industry and get it going. So the idea is get it off the ground and then let it operate as its own business model. We see that happening around the world, especially in solar,” Mr Dudley said.