50 gigawatts of renewables – this is how BP wants to transform its business

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Düsseldorf The British oil company is in the middle of the crisis BP a radical strategy for corporate restructuring – away from fossil energy. Shortly after Bernard Looney announced a billion dollar loss and dividend cuts for the second quarter, the new BP chief explained in a two and a half hour digital press conference how one of the world’s largest oil companies should become a green energy company. The supplied 65-page position paper has it all.

By 2030, investments in renewable energies are expected to gradually increase to $ 5 billion a year. For example, BP plans to produce 50 gigawatts of green electricity within the next ten years while reducing its oil and gas production by 40 percent.

That is probably not enough for most climate protectionists, after all, five billion dollars for renewables is only 40 percent of what BP spends on fossil oil and gas projects this year alone. At the same time, however, $ 25 billion will be written off on fossil projects by 2030. It is a radical step for the oil industry. And that was sorely needed.

The pressure from politics, environmental activists and climate-conscious investors on fossil energy companies has increased steadily in the past two years. The ClimateAction 100+ group, whose members manage $ 33 trillion in funds, is increasingly advocating a more climate-friendly strategy at oil companies’ general meetings.

And BP knows best that the demand for oil will not continue to rise. In their own annual Energy Outlook, the experts assume that demand will stagnate from 2035 to 2040 at the latest, while renewable energies will continue to grow. A change that poses a major challenge to the oil industry and comes at a time when the business with fossil raw materials is anything but good.

The only way into the future

Even before the corona crisis, the profits of the large multinationals were under pressure. The gas and oil market is oversupplied and prices are lower than expected. And the prospect of stricter climate laws is dampening the expectations of the industry that has been used to success so far.

Do Exxon Car, Shell, Chevron and the other corporations continue to face losses of billions. The value of newly planned oil projects could halve in the next five years, the analysis company Carbon Tracker recently warned in a recent study. The calculations are based on a scenario in which the global community imposes stricter climate protection legislation.

A possibility that is becoming ever more realistic thanks to the European Green Deal. Investing in renewables is therefore not an ideological decision of the billion-dollar company, but the only way to secure its place in the energy industry in the future.

In February, BP announced that Shell was the second oil company to become climate neutral by 2050. Total, Equinor and Eni followed. So far, however, BP is the only company that has already published initial information on how it intends to achieve the new goals.

For this, the British want to invest primarily in the areas of bioenergy, hydrogen and in the storage of CO2. In addition, 70,000 charging stations for electric cars are to be set up worldwide in the next ten years. BP plans to present the complete strategy in September.

More: Oil companies post billions in losses in the second quarter.

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