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| Sat, 25th Apr 2020 16:50:00 |
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Oil Slump May No Longer Be a Curse for Renewable Energy |
Low oil prices are usually a curse for green energy, but this time might be different.
The collapse of the crude market has seen prices fall below zero for the first time in history. Yet Royal Dutch Shell Plc this month outlined a bold program to slash carbon emissions and invest in clean energy, while Eni SpA said Friday it'll consider accelerating its ambitious climate plan.
There's always been tension between calls for Big Oil to tackle climate change and their investors’ doubts about the profitability of spending on renewables. Historically, a plunge in crude prices has tended to undercut costlier clean energy, prompting companies to divert dwindling financial resources into their core business of fossil fuels.
What's different this time is that the cost of renewables and natural gas has broken away from oil, weakening crude's influence on the price of electricity. While the coronavirus has destroyed demand for oil and transport fuels, power use has dropped less sharply. And importantly, energy companies are now painfully aware of the mounting pressure from consumers -- and investors -- to clean up their output, rein in emissions and prepare for a future beyond oil.
"The situation is totally different since the last time oil prices were this low," said Nick Boyle, chief executive officer of solar company Lightsource BP. The cost of solar is a 10th of what it was during the recession of 2008 to 2009. Even as crude has slumped, "in the last few weeks we have announced new deals on nearly 400 megawatts of new capacity in the U.S. alone," he said.
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