Explained: Why are oil & gas cos exploring green energy options?
Global moves to reduce carbon emissions to slow down climate change have led to oil and gas companies around the world investing in renewable energy to reduce their carbon footprint and diversify offerings.
State-owned Oil and Natural Gas Corporation is considering inorganic investments to reach a target of 10 GW of installed renewable energy capacity by 2040. Other oil and gas PSUs are also investing in renewable energy.
Why are oil and gas companies investing in renewable energy?
Global moves to reduce carbon emissions to slow down climate change have led to oil and gas companies around the world investing in renewable energy to reduce their carbon footprint and diversify offerings. State-owned upstream and downstream oil and gas companies are also taking part in energy investments to help achieve the government’s ambitious renewable energy targets.
India is targeting 450 GW of installed renewable energy capacity by 2030 up from about 100 GW currently.
What are some of the renewable energy investments by Indian companies?
India’s largest upstream oil and gas company, ONGC, is targeting 10 GW of renewable energy capacity by 2040, up from 178MW of renewable energy capacity at the end of FY20. ONGC Chairman Subhash Kumar recently said the company was looking at acquisitions to help achieve its renewable energy targets.
India’s top natural gas company, GAIL, is also looking at acquisitions to augment its 130 MW renewable energy portfolio. The company is aiming at reaching 1 GW of renewable capacity within 3-4 years.
Downstream players have also started investing in renewable energy and electric charging infrastructure, with an eye on a potential shift towards electric mobility. Indian Oil Corporation Ltd, India’s largest refiner, had a total installed renewable energy capacity of about 233 MW at the end of FY21. It has also set up 257 electric charging and battery swapping stations at 29 retail fuel outlets. Sources at IOCL said the results of its battery swapping stations were positive and that the company was looking at a potential joint venture (JV) with Sun Mobility to provide battery swapping on a larger scale in the future. IOC is also setting up the first green hydrogen plant in India in Mathura.
IndianOil also has a JV with Israel-based battery technology startupPhinergy to develop aluminium-air technology based battery systems for electric vehicles and stationary storage.
Hindustan Petroleum Corporation Ltd has tied up with Tata Power to set up electric vehicle charging at various retail points around the country. It has also set up about 133 MW of renewable energy capacity, including about 100 MW of wind energy capacity. Bharat Petroleum Corporation Ltd had installed renewable energy capacity of 43 MW at the end of FY20.