Flow Level Pressure
Are Gas and Renewables Competing Against Each Other?
Mar 01 2020 Read 284 Times
While the planet is supposed to be working together to combat the air pollution and climate change crisis, some experts are warning that gas and renewables companies are competing against each other. The warning was issued in the 10th annual oil and gas industry outlook released by DNV GL, an international registrar and classification society based in Norway.
It stated that almost 50% of oil and gas companies "believe gas and renewables are competing against each other." The data drew on responses from a survey of more than 1000 fossil fuel leaders from 78 countries. While it's no secret oil and gas will continue to play a major role on the global energy stage until at least 2050, the outlook warns that 48% of industry leaders believe fossil fuel and renewables are in direct competition.
Collaboration essential to addressing "energy conundrum"
To address what DNV GL refers to as the "energy conundrum" analysts stress both industries need to identify and exploit common goals, not deepen divisions and encourage competition between the two key industries.
Hari Vamadevan, UK and West Africa regional manager at DNV GL says a collaborative partnership between gas and offshore renewables such as wind and solar could be the answer. “When you have renewable, you have to accept that’s a more volatile supply. That’s a very unusual energy system because that’s a volatile supply and a volatile demand," explains Vamadevan. “That’s a difficult energy system to manage and therefore you need some options for constant supply. Some will tell you nuclear is the answer, but also gas.”
Calls for portfolio diversification
While more than 70% of oil and gas firms are planning to maintain or increase spending on decarbonisation in 2020, Vamadevan says to make a real difference energy companies must not only reduce emissions but also pledge support for renewable projects and diversify their fossil fuel-heavy portfolios. To do this, collaborating with existing green energy companies is a must.
Cheap gas jeopardising decarbonisation goals
Other experts cite cheap gas as a major hurdle to the advent of renewable energy. While gas has a much cleaner reputation than coal and oil, low prices have analysts concerned that investments and motivation to advance the renewable energy market will falter. As a result, meeting decarbonisation goals will be much harder for countries like America, where the market has been flooded with cheap gas.
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