International oil companies have accelerated spending plans on renewable energy projects, but they still need to allocate an extra $124bn to meet their net-zero targets by 2030, according to estimates by energy research firm Rystad.
However, Gero Farruggio, head of renewables at Rystad, is optimistic. “I have no doubts these companies will achieve their targeted capacity by 2030, given their current pace of acquisition [of renewable energy projects],” he says.
These companies have been rushing to announce ambitious investment plans to decarbonise their industrial footprint. On September 14, US Chevron unveiled a $10bn energy transition investment, joining the long list of oil and gas peers that announced similar plans earlier this year. To date, international oil companies have committed a total $86bn to developing their portfolios of renewable energy projects, Rystad estimates.
Most of the projects in these portfolios have yet to come online, though. Rystad figures show that IOCs operate some 9.3GW of utility renewables globally — less than 1% of global green energy generation — with a further 5GW under construction.
Even if these companies managed to fully develop their portfolios, many more projects are needed for them to close in on their energy transition ambitions.
“Their existing portfolios make up a fraction of the capacity they want to achieve by 2030,” Mr Farruggio says, although this varies greatly across the companies analysed by Rystad. On the one hand, Norwegian Equinor, Spanish Repsol and Anglo-Dutch Shell are on par to meet their 2030 targets; on the other hand, the existing portfolio of projects of BP and Total Energies accounts for less than a half of the 50GW of installed green energy capacity that each company wants to have in place by 2030.
“That’s the scale of the challenge some of these companies are facing,” Mr Farruggio notes.