BP’s Energy Targets “VERY DIFFICULT” to Achieve

BP’s Energy Targets “VERY DIFFICULT” to Achieve

British Petroleum has set a green energy target of 50 gigawatts from natural renewables like solar, wind, and hydropower by 2030, as compared to the current production of only 2.5 GW. The set target is also more than the renewable capacity of the UK today.  

The gas and oil giant would be required to spend billions of dollars over the coming ten years and still accept meagre ROI than it is getting from oil today to attain the target of becoming the largest renewable energy generator in the world.

Last week also, the British company announced to cut the oil productions over ten years, following the Italian oil firm, ENI, which announced similar scenarios earlier than BP. 

Experts predict that the easiest way for the British gas firm to scale up and attain its targets is through large offshore wind farmlands. However, it still has high costs and would take years of time to develop, because of which BP might require to go for acquisitions. 

British Petroleum already has a huge debt of $41B (31.43B GBP), followed by the investors’ attraction towards green energy and a hesitant attitude from fossil fuel productions. The company’s decision is in response to falling share prices, which has already halved in the last two years, plunging the market value to $80B.

In comparison, the Orsted, Denmark and the world’s largest offshore wind developer, stock prices have increased by 135% in the last two years, reaching the market value of over $60B now. Denmark’s Orsted currently has 10 gigawatts of wind power installed, which is one-fifth of BP’s target and expects its production to add another 3.8 GW.

Meanwhile, Iberdrola, which already has 33 gigawatts of renewable energy plants installed and working on many other similar projects, have surged over 78% in the same period as BP and Orsted, and have attained a market value of $80B, same as BP.

European companies are already under squeeze from investors, banks, activists, and governments to move its focus from fossil fuel productions and find alternate business models that provide higher margins than green energy production is generating today.

According to International Renewable Energy Agency, the world’s total renewable energy capacity is near to 2,500 gigawatts. However, it is targeted to surge massively in response to several nation’s fewer emission target, set in the 2015 climate agreement in Paris. IREA also reported that currently the renewable energy, including solar, hydro, and wind power, accounts for around 25% of the electricity produced globally.

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