Big Oil and gas producers might finally have found a renewable energy they can fully embrace — largely because it has a lot in common with oil and gas, Axios' Amy Harder reports.
Driving the news: Up to 40% of the costs of offshore wind, including construction and maintenance of massive structures, overlap with offshore oil industry costs, a new International Energy Agency report finds.
Where it stands: While the U.S. has just one (tiny) offshore wind farm, a boom is on the horizon with a slew of companies planning big projects.
- European oil and gas majors are leading, with Equinor, Shell and BP either already operating existing offshore wind farms or actively expressing interest in it.
- The world’s largest offshore wind developer, Denmark-based Ørsted, used to be an oil company. It changed its name from Danish Oil and Natural Gas and dumped its fossil fuel assets two years ago.
By the numbers: About 30% of the federal offshore wind leases that the Interior Department has auctioned to date are tied to the oil industry (Equinor and Shell), according to BloombergNEF data.
Why it matters: These companies have deep pocketbooks and global reach. If they make big bets on offshore wind, which accounts for just 0.3% of global electricity today, its growth could exceed current expectations.
- The IEA predicts it’ll increase at least 15-fold in the next 20 years.
- “The technology of offshore wind has made a real move forward, I would say, over the last four years,” BP CEO Bob Dudley told me in a recent interview. “We would be natural investors in that if the economics were acceptable.”
- BP operates some onshore wind farms, but no offshore ones. Dudley said BP is looking at several countries, including the U.S., but declined to offer specifics.
The big picture: Oil majors are under pressure from shareholders, lawsuits and the public to more readily acknowledge their role fueling climate change and more fully embrace a global, albeit uneven, transition to cleaner energy sources.
Between the lines: A trend among these companies is to buy stakes in separate developers already focused on clean energy, such as solar and electric vehicle charging.
- But because of the significant crossover between offshore oil and wind, the producers are more likely to make it part of their internal portfolios.
Go deeper: Troubles lurk for America’s emerging offshore wind boom