Bp And Shell Decides To Reduce Investments In Electric Power Industry
Date
12/11/2024 3:11:11 PM
(MENAFN- AzerNews)
By Alimat Aliyeva
British companies BP and Shell have decided to scale back their
ambitious goals to become major players in the electric power
industry, following weak progress and growing skepticism about
renewable energy sources, Azernews reports.
Over the past five years, the oil giants have invested a
combined $18 billion in these efforts.
A few years ago, Shell set the goal of becoming the world's
largest electric power company, with its representatives predicting
that electricity revenue would match profits from oil and gas by
2030.
Similarly, BP pledged to increase its spending on green energy
tenfold to $5 billion per year by the end of the decade and expand
its renewable energy portfolio twentyfold to approximately 50
GW.
However, BP and Shell are now planning to reduce investments as
their shares dropped by more than 16% and 2%, respectively, this
year. According to one industry leader, the companies find
themselves stuck in the "valley of death" – torn between
traditional shareholders who support fossil fuels and a new
generation of investors focused on climate change action.
Shell, which, according to the Accela research group, has
invested $11.8 billion in energy transition projects since 2019,
has sold its electricity retail businesses in the UK, the
Netherlands, and Germany, exited the Chinese electricity market,
and last week announced it would not pursue new offshore wind
energy projects.
BP, which has invested $6.8 billion in low-carbon energy, has
placed its offshore wind assets into a joint venture with Japanese
partner Jera. The company had planned to allocate $3-5 billion
toward green energy by 2025.
Both Shell and BP's decision to scale back their investments in
renewables highlights the challenges energy giants face in
balancing their traditional fossil fuel operations with the growing
pressure to invest in cleaner energy. This shift may also indicate
a broader trend of oil companies reassessing their strategies
amidst economic uncertainty and evolving investor priorities. With
increasing concerns about climate change, these companies are
finding it difficult to transition quickly enough to appease both
environmentalists and shareholders, pointing to the complex
dynamics of the energy transition.
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