A paradigm shift seems to be moving in renewable energy space as oil majors who once dismissed electric cars decades ago are now muscling into driver’s seat of the “new fuels” industry.
In order to meet up with infrastructure demand from electric-vehicle, International Oil Companies (IOC) like Royal Dutch Shell’s, France’s Total, Chevron and ExxonMobil are making big moves to share from what seems to be an emerging market cake.
According to Bloomberg New Energy Finance (BNEF), Royal Dutch Shell’s recently purchase Greenlots, a startup offering software and services for electric-vehicle charging networks. Shell plan on using Greenlot’s technology, which combines software to optimize battery charging and grid balancing services in one charging platform, to build the foundation of its electric-vehicle business in North America.
BNEF noted that Shell is pouring about $1 billion a year into such deals, including the acquisition of 30,000 charging stations in Western Europe, as well as a $31 million investment into electric-vehicle charging startup Ample in 2018.
France’s Total closed a deal for G2mobility, which offers EV charging solutions, as well as a $1.7 billion deal for Direct Energie last year, making it a major electricity retailer in France as well. Reuters reported, Total wants to grow its “low-carbon energy assets” from 5percent of the total today to 20percent by 2035.
Chevron and ExxonMobil are also beginning to edge into utilities’ traditional territory. Last year, Chevron participated in a $240 million round for ChargePoint, a network of independently owned charging spots, valued at $1.5 billion, according to U.S based data, research and private equity firm Pitchbook.
BNEF said public charging infrastructure is ramping up almost everywhere, and each region has its own unique mix of players. For example in Europe, 79percent of the public charging infrastructure is operated by utilities and oil companies. In the US, 62percent of the market is managed by pure-play EV operators. In China, equipment manufacturers control the majority.
An Energy research and consultancy firm Wood Mackenzie counted more than 350 new electric vehicle (EV) models debuting by 2025, which is one of the conditions for mass-market adoption. Also, Global demand for gasoline is set to peak around 2021 thanks to electric vehicles and fuel efficiency gains.
Mackenzie estimated that total charging-energy demand for the EV vehicle population across China, Europe, and the United States could grow dramatically from 2020 to 2030, increasing from roughly 20 billion kilowatt-hours to about 280 billion kilowatt-hours.
“This estimate reflects assumed EV adoption, total miles driven per year, and the average kilowatt-hours required per mile (a miles-per-gallon equivalent). While 280 billion kilowatt-hours sounds like a big number, it represents less than 10 percent of current US energy demand while reflecting the requirements of all four markets,” Mackenzie said in its electric vehicle survey.
Most of Europe’s biggest oil firms are not only moving into electric-vehicle charging space but also into power trading, energy storage, retail electricity sales, and grid management.
A report by UK based data analytics company GlobalData said oil and gas companies are also diversifying into power generation and battery manufacturing, two areas where demand is set to increase with the growing adoption of electric vehicles.
“Electric vehicles consume more power than a typical household; hence the addition of each EV would drive the power demand significantly. This has prompted oil and gas companies to partner with or acquire utility companies to expand their electricity generation capabilities beyond captive power,” GlobalData said.
Last year, Norwegian oil company Statoil dropped ‘oil’ in its name and rebranded itself as ‘Equinor’ in an effort to diversify beyond the oil and gas business and mainly into renewable energy projects, to reduce its carbon footprint and appear more relevant in these evolving energy dynamics.
GlobalData’s thematic research identifies Royal Dutch Shell, BP, Total, and Repsol as some of the key companies at the forefront of the deployment of electric vehicle technology over the next two to five years.
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