Why Oil and Gas Companies Want to Control the Renewable Energy Market
Introduction: Transitioning to Renewables
As India advances toward its ambitious renewable energy (RE) targets, oil and gas companies—both domestic and international—are playing a significant role in shaping the energy landscape. From green hydrogen projects to solar and wind acquisitions, these companies are leveraging their expertise and capital to dominate the RE sector. Their large-scale investments highlight the importance of renewables not just for decarbonization, but also for ensuring long-term business sustainability in a rapidly evolving energy market.
Here’s a snapshot of key renewable energy investments by oil and gas majors in India and globally.
Table: Renewable Energy Investments by Oil and Gas Companies
| Company | Project/Acquisition | Year | Investment | Renewable Capacity | Details |
|---|---|---|---|---|---|
| Reliance Industries | Green Hydrogen and Solar (REC Group) | 2021–2023 | ₹75,000 crore | 10 GW (solar PV manufacturing) | Major push into green hydrogen and solar PV manufacturing; aims to produce 5 MTPA of green hydrogen by 2030. |
| Essar Oil and Gas | Green Hydrogen and Renewables | 2023 | $3.6 billion | 1 GW | Investment in decarbonization initiatives, including hydrogen production at its Stanlow refinery. |
| TotalEnergies | Adani Green Energy | 2021 | $2.5 billion | 11 GW | Acquired a 20% stake in Adani Green Energy to scale solar and wind projects in India. |
| Indian Oil Corporation | Green Hydrogen and Renewable Energy JV | 2022 | ₹2,000 crore | 7 GW | Collaboration with NTPC for green hydrogen and renewables projects. |
| BP | Partnership with Reliance (KG-D6 Basin) | 2023 | ₹10,000 crore | Focus on renewables, hydrogen | Joint green hydrogen production projects as part of a broader decarbonization strategy. |
| ONGC | Offshore Wind Energy | 2023 | ₹20,000 crore | 5 GW | Offshore wind projects in partnership with international companies. |
| Shell | EV Charging Stations | 2023 | ₹1,200 crore | 10,000 EV points by 2030 | Expansion into India’s EV infrastructure market, integrating renewables for charging facilities. |
| Essar Energy Transition | Renewables and Hydrogen in Gujarat | 2023 | ₹54,000 crore | 5 GW | Focus on green hydrogen, renewable power, and decarbonization at the Jamnagar hub. |
| HPCL | Solar and Green Hydrogen | 2022 | ₹1,000 crore | 370 MW (solar) | Investments in solar and hydrogen projects across multiple states. |
| TotalEnergies (India) | Green Hydrogen Hub | 2023 | $1 billion | Integrated project | Developing India’s first integrated green hydrogen ecosystem. |
1. Securing Market Relevance in India
India’s ambitious goal of achieving 500 GW of renewable capacity by 2030 is driving oil and gas majors to invest heavily in the country’s renewable sector. Key reasons for their involvement include:
- Revenue Diversification: As India pushes for decarbonization, reliance on fossil fuels is declining. Companies like Reliance Industries are investing in green hydrogen and solar PV manufacturing to ensure future revenue streams.
- Green Hydrogen Leadership: With its potential to decarbonize hard-to-abate sectors like steel and shipping, green hydrogen is emerging as a key area of focus. Reliance Industries, for instance, plans to produce 5 million tons per annum (MTPA) of green hydrogen by 2030.
Case Study: Reliance Industries
Reliance has committed a staggering ₹75,000 crore to renewables, including green hydrogen, solar PV, and battery storage projects. Its acquisition of REC Group, a leading global solar manufacturing company, underscores its ambition to dominate both domestic and international markets.
2. Leveraging Infrastructure and Expertise
Oil and gas companies are uniquely positioned to expand into renewables due to their existing infrastructure, technical expertise, and capital resources. In India, they are using these advantages to:
- Scale Offshore Wind: ONGC is collaborating with global players to develop 5 GW of offshore wind capacity, leveraging its experience in offshore drilling.
- Develop Green Hydrogen Hubs: TotalEnergies, in partnership with Adani, is building an integrated green hydrogen ecosystem, aiming to cater to both domestic and export markets.
Example: Essar’s Energy Transition
Essar’s $3.6 billion decarbonization plan includes the development of green hydrogen capacity and renewable power in Gujarat. This investment aligns with its strategy to repurpose its refining assets for sustainable energy production.
3. Building an Edge Over Traditional Players
By entering renewables, oil and gas companies are gaining an edge over traditional renewable players through:
- Integrated Value Chains: Companies like TotalEnergies and Reliance are integrating green hydrogen, solar, and wind projects to create comprehensive energy solutions.
- Green Hydrogen Leadership: Green hydrogen, which requires renewable electricity, positions these companies to dominate a niche that could transform industrial energy use.
- Control of Emerging Markets: With heavy investments in EV infrastructure (e.g., Shell’s plan to install 10,000 EV charging stations), oil and gas companies are positioning themselves to lead the future of transportation.
Conclusion: A Strategic Move for the Future
Oil and gas companies are not just entering the renewable energy market—they are redefining it. By leveraging their infrastructure, expertise, and financial muscle, these companies are ensuring that they remain at the forefront of the energy transition. Their large-scale investments in solar, wind, and green hydrogen demonstrate a clear intent to control the future energy ecosystem.
In India, where the renewables sector is growing rapidly, oil and gas companies are playing a pivotal role in achieving the nation’s decarbonization goals. From Reliance’s leadership in green hydrogen to TotalEnergies’ partnership with Adani, these companies are shaping a cleaner, greener energy future while maintaining their dominance in a changing world.
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