Oil and gas firms take cautioun as renewables gain ground in global power, GlobalData says

The power mix shifted as fossil fuel firms limit exposure whilst renewables scale toward 40% by 2030.

Global power generation continued to shift towards renewable energy (RE), but oil and gas companies are proceeding cautiously with investment in the sector, according to GlobalData.

RE output has increased significantly over the past decade as global power generation rose by about 30%, whilst renewables have nearly doubled over the period and are expected to account for more than 40% of global power generation by 2030.

The report noted that fossil fuels are forecast to decline from 62% of global power generation in 2020 to 50% by 2030.

It also said renewable power generation totalled 7.4 petawatt-hours (PWh) in 2020 and is projected to reach 16.1 PWh by 2030, representing a compound annual growth rate of 8.1%.

Oil and gas companies have expanded into RE as part of portfolio diversification, GlobalData said, citing companies such as TotalEnergies, BP, Shell and Equinor.

Investment patterns differ by region. Companies operating in Europe and Asia have benefited from policy support and incentives, which has driven renewable project development.

In the US, higher costs, regulatory uncertainty and permitting delays have led to project delays, pauses and cancellations.

Ravindra Puranik, Oil and Gas Analyst at GlobalData, said renewable development has increased due to decarbonisation policies, energy security concerns and lower technology costs driven by scale and efficiency gains.

Oil and gas companies continue to invest in RE projects whilst maintaining exposure to fossil fuels as global power demand rises and generation systems transition.