Equinor abandons target for renewable energy

In a Tuesday strategy update, the Norwegian oil and natural gas company Equinor announced that it had 'further reduced its ambitions in renewable energy,' dropping a target of 2030 installed capacity and cutting investment plans. This reflects a trend in the industry, as other companies, such as BP and Shell have recently abandoned plans to switch from oil and natural gas production to renewable energy. Equinor, who?on Monday raised its oil-and-gas output forecast?, has dropped the 2030 renewable capacity goal in favor of an outlook on power generation that includes nonrenewable technologies.

"We do not replace one business with another. We are instead developing multiple paths in parallel, including oil and gas as well as power and renewables.

Opedal, who presented a strategy update to analysts in New York Tuesday, said that it had been obvious for many years that Equinor wouldn't reach its "target" of 10-12 gigawatts installed renewable energy by 2030.

He said that the goal was to build a profitable company, and as the costs of renewable energy increased, so did the pipeline of projects.

Equinor cut its previous ambitions to become "an offshore wind giant" by 2020 and also to devote half of its capital expenditures to renewables during the 2030s. Equinor established its Power Business Area in 2025, combining its renewable portfolio, gas-fired generation, energy storage assets, and trading activities.

Equinor’s new plans only allocate 10% of its capex to the power business. The company still expects a fourfold rise in 'power production' to 20 terawatt-hours in 2030. This will be mainly due to electricity projects that are already under construction.

The company has also backed off a target of storing and transporting 30 to 50 millions metric tons carbon dioxide per year by 2035. We have a sufficient amount of storage space to meet that target if the market is there. Irene Rummelhoff, Equinor's head of Midstream, Marketing and Processing, stated that they would not be running ahead of the market. (Reporting and additional reporting by Nerijus Adomatis; editing by Terje Solsvik, Barbara Lewis, and Nora Buli)

(source: Reuters)