From brown to green: all against fossil energy

  • Electric companies accelerate investments in renewable projects, while oil companies promote their diversification towards clean sources

The European Union aspires to become the first climate-neutral economy by 2050. Energy is a fundamental piece to achieve this goal, being responsible for almost 80% of total CO2 emissions. In this context, the drive for cleaner energy regulation and investor pressure towards sustainability has led large energy companies to accelerate their turn to green, although without saying goodbye to their brown assets.

“It is logical that companies adapt their business models to the pressure of public opinion, investors, regulators …”, points out the head of the Climate and Energy program of the Real Instituto El Cano, Gonzalo Escribano. Clean energies stopped needing help for a long time and there are many investors who are betting on this sector. An example is the incursion of Amancio Ortega hand in hand with an oil company such as Repsol in a wind farm in Aragon.

“Sustainability is increasingly becoming a key axis of the transformation of companies, as a consequence not only of regulation, but also of changes in the demands of consumers and investors”, explains the partner of regulated sectors and economic analysis in EY, Antonio Hernandez.

According to the World Economic Outlook (WEO) of the International Energy Agency (IEA), oil and fossil fuels such as coal and gas lose more and more relative weight in favor of renewables. The latest update of this report reflects a steep fall in coal until its complete disappearance in 2050 and a peak in oil demand in 2025 and 2026. And, for the first time, after the crazy price increase in recent months flat growth is planned for gas as of 2040.

In Spain, after all companies have put an end to coal (all plants are in the process of closing) and signed the final path of nuclear (all plants will be closed between 2027 and 2035), Endesa was the first power company to set a date for the farewell to gas: 2040. “The decade of renewables begins. The next decade we have a new scenario for energy in sectors of the economy where electricity was something unknown. The decade of electricity is beginning,” proclaimed the CEO of Enel, owner of 70% of Endesa, Francesco Starace.

The large electricity companies plan to allocate half of their investments in the coming years to promoting renewables. Iberdrola will invest 14,300 million, of which more than 7,000 will be allocated to clean energy. Endesa, for its part, estimates that of the 7,500 million euros that it will invest until 2024, 3,100 million will be ‘green’, and Naturgy estimates to allocate 8,400 million of the 14,000 million planned until 2025. The big oil companies do not want to miss that train either, knowing that they have to diversify their activity in order to be viable in the future.


Although the focus of the business continues to be crude oil, most oil companies have made renewables the main destination for their investments. Repsol plans to invest 19.3 billion euros until 2030, of which 6.5 billion will be allocated to low-carbon initiatives. In addition to the electricity area, the generation and commercialization of electricity (after the purchase of Viesgo) and the promotion of electric mobility, Repsol is immersed in adapting its refineries to the production of biofuels. A month ago the company carried out together with Iberia the first flight with biofuel produced in Spain from waste. It managed to reduce the emission of 1.4 tons of CO2 thanks to the energy efficiency provided by the plane and biofuel.

Also BP and Cepsa intend to follow a similar direction. The objective is to stop being an eminently oil company and become multi-energy. A good example is the Norwegian state company Statoil, which since 2018 is called Equinor with the aim of having a greater industrial presence in renewable energies. Between 2021 and 2026, Equinor announced a gross investment in renewable energy of 23,000 million dollars to multiply the renewable energy capacity by ten and to be “one of the main offshore wind companies worldwide”. However, the money that will sustain that investment still comes from oil and gas. “The pace of change will increase towards 2030 and 2035,” said its CEO at Capital Markets Day, Anders Opedal.

Large companies ask for EU funds to be able to develop hydrogen

The hydrogen rage

In addition to the push towards renewables, electric mobility and biofuels, Spanish electricity and oil companies have launched in the last year towards green hydrogen. The great downside of this energy vector is its lack of competitiveness and the unknown of when and how it will reach the necessary maturity and, therefore, companies entrust themselves to European funds to promote their development. The Recovery Plan estimates at least 1,500 million euros for this new energy agent.

Repsol plans to allocate 2,500 million to this technology between now and 2030, while Iberdrola would activate investments worth 1,500 million euros. The utility this week announced an agreement with Sweden’s H2 Green Streel to build a green hydrogen plant on the peninsula. And Enagás is promoting several projects with different partners for a total of 6,300 million euros. Naturgy and Endesa have not quantified the investment, but they have planned projects in this area.

“Companies have seen that green hydrogen has a future because there is money from European funds and the technology is there, but you have to be careful because there is a certain element of a bubble in the battle to hunt down European funds, “says the professor at the Universidad Pontificia de Comillas and director of the Economics for Energy research center , Pedro Linares placeholder image.

The rest of the world

Related news

Although this trend towards sustainability is global, not all countries follow the same guidelines as Europe, with enormous differences with countries like China, and great paradoxes such as that in the midst of the ‘green era’ the giant Saudi Aramco is one of the largest companies valued in the world.

The former State Commissioner for Energy, Miguel Arias Cañete, warned this week that the European Union is the most ambitious region in terms of reducing emissions, so it is a diplomatic task to make the rest of the countries “create stable regulatory frameworks that attract private investment, not only in Switzerland but also in Guinea Bisau or in any other country in the world. “

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