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2021: Big Tech to rival oil majors in billion dollar renewable energy spending

Why renewable investors are in early 2021 rush for Nigeria’s market

When it comes to which corners of the corporate world would spend the most in renewable energy, it’s no secret that big technology companies will rival oil majors in 2021.

Tech giants Google, Amazon, Facebook, and Microsoft have been dominating clean energy procurement over the past five years, and are looking to continue being renewable energy’s biggest customers in 2021, a development which will come under rivalry from oil majors such as British Petroleum (BP), France’s Total, Royal Dutch Shell Plc, and Chevron.

“With COVID-19 exposing the link between public health and clean energy, tech giants are preparing for a renewables surge. As it happens, they must take charge and fully integrate the most sustainable solutions,”RBC Capital Markets analyst Biraj Borkhataria said.

For instance, Amazon has revealed plans to invest in four new renewable energy projects to support the company’s objective to achieve 80percent renewable energy by 2024 and 100percent renewable energy by 2030.

Also, Facebook intends to power its global operations with 100percent renewable electricity by 2021 and has recently added 3 gigawatts to its portfolio towards this ambition. In 2018, Facebook inked the most renewable energy contracts among corporations.
Google signed contracts to purchase over 2.7GW of clean energy globally, the biggest clean energy commitment by any company on the planet last year. That included contracts to buy 1.9GW of clean energy in six countries.

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Google employs a unique reverse auction process when signing renewable energy contracts, with developers taking part in a live, public bidding process. The company also signed up to $2 billion wind and solar investments with plans to use the clean energy to power its massive data centers.
While it’s commendable to see these tech titans identify and minimise their massive carbon footprint across the globe, however most renewable experts said these companies also find investing in renewable energy lucrative.
“Data centres are the backbone for most tech companies and these centres are massive energy guzzlers. Google claims that electricity costs are in fact the largest operating cost of data centres. Switching to renewable energy locks in the electricity cost for a long term and protects companies from any swings in energy costs,” Borkhataria said.

Apart from Big tech spending, Oil majors who operate in a sector that is frequently castigated for its outsized role in climate change, is beginning to make its presence felt here in a big way, too.
Analysis by Rystad Energy showed near-term spending plans on renewables by the biggest oil and gas companies shows that real investments in renewable energy will continue to pale in comparison to capex plans for greenfield fossil fuel projects

French multinational integrated oil and gas company, Total SA stands out as the supermajor with plans to develop the most renewable capacity in the near-term.
In the current year alone, Total plans to double its gross global renewable energy capacity to 6 gigawatts (GW) from just a year ago, with the company playing the lead role as the developer and owner of the renewable energy assets over the long-term.
Italian multinational oil and gas giant ENI also says that its renewable projects will achieve an installed capacity of 3 GW in 2023 and 5 GW in 2025.