Over the long term, the energy transition is expected to chart the fading fortunes of those who rely on fossil fuels for their income and boomtime for the technology suppliers of the new green era.
It sure didn’t look like that this week, however, as two of the world’s oil & gas supermajors, BP and Shell, unveiled bumper first-quarter profits buoyed by soaring energy prices while the world’s wind turbine giants struggled in a sea of red ink.
Faced with questions over whether the proceeds of the fossil bonanza would be used to fund a bigger, faster energy transition, the message from BP CEO Bernard Looney was “growth but not at any cost” as he emphasised his determination to only back projects that can deliver the returns it needs.
For his part, Shell CEO Ben van Beurden was bullish about his company’s prospects in the hydrogen sector, where he claimed it is making “the most progress” and flagged the prospect of major investments imminently.
As Recharge reported, other fossil players such as Galp, Respol and Eni were this week either active in renewable acquisitions or weighing their next moves in green power markets where they have “cash flow to grow”.
As the oil giants decide where to spend their money, the planet’s biggest wind turbine makers are wrestling with a very different set of problems. Vestas became the latest to unveil a steep first-quarter loss in the wake of ongoing supply chain challenges and big write-downs related to Russia’s invasion of Ukraine. CEO Henrik Andersen also urged competitors to maintain pricing discipline on orders or risk getting “hurt” in the market.
Fellow OEM giant Siemens Gamesa continues to chart a course back to profitability under new CEO Jochen Eickholt, who this week flagged lessons the manufacturer could learn from the automotive sector. Key to its revival plans will be newly appointed chief operating officer Tim Dawidowsky, who joins from parent group Siemens Energy with what Eickholt called a “proven track record of effecting successful turnarounds”.
As the likes of BP and Shell bring their massive spending power to bear on offshore wind, some of the sector’s early movers are looking again at their own place in the sector and possibly concluding it is time to move on.
That was the case this week with Wpd, the German developer that built some of Europe’s first wind farms at sea and began a global expansion but has now agreed to sell its offshore business to Global Infrastructure Partners.
Across the Atlantic, Eversource Energy, the US utility that with Orsted has pioneered early American offshore wind farms has launched a review of its JV with the Danish group and could sell some or all of its stake.
For those still in offshore wind, the opportunities continue to grow at a rate of knots. Sweden’s fast-emerging market was confirmed in an exclusive Recharge interview as a multi-gigawatt floating target for Norway’s Deep Wind offshore, while another big potential growth market sailed into view in the form of Colombia, where BlueFloat Energy hopes to build 5GW.
Innovation continues to transform the offshore wind sector on a weekly basis. Recharge offered an exclusive in-depth look at the latest example when Fred Olsen 1848 – a spin-off of the Norwegian maritime giant – unveiled a new-look modular floating wind concept that it sees leap-frogging pilot and demonstrator projects to reach commercialisation as early 2025.
Orsted, meanwhile, proved that R&D doesn’t exclusively have to be dedicated to advancing offshore wind’s operational cause when it revealed ReCoral, a ‘world-first’ bid to grow corals on turbine foundations to replace those damaged by global warming at reefs.
