Oil major ExxonMobil will power its operations at a Texas oil field with electricity from wind and solar projects.(SEE: Fossil Fuels’ days are over)
The firm has faced criticism for its response to climate change and has been slower than its peers to hedge their bets by becoming involved in the clean energy sector.
The contracts for the Permian filed in West Texas will be fulfilled by Orsted, which itself was the Danish state-run oil and gas company before a rebrand and its divestment of fossil fuel assets in 2017. In a presentation at its capital markets day in Copenhagen on Wednesday, Orsted revealed the two 250MW power purchase agreements (PPAs). The Permian Solar and Sage Draw Wind projects will be complete in Q2 2021 and Q1 2020 respectively. The company said the combination of solar and wind power supply is designed to maximise the round the clock supply for a corporate client and a sign of “where onshore renewables are heading”.
Orsted added that there was scope for “further synergies possible in long-term operations and capex”.
Oil majors have become increasingly engaged with renewable energy via a diverse range of strategies from a collaborator, owner and customer. France’s Total has been the majority owner of solar module manufacturer SunPower since 2011. It also acquired energy storage manufacturer Saft.
BP purchased a 43% stake in UK solar developer Lightsource in December 2017. The new venture Lightsource BP has since expanded into a number of international markets including India and Brazil. Shell completed a very similar deal with US-based company Silicon Ranch the following month. Shell is also the sole customer for all the power generated at the UK’s largest solar farm.
The Lightsource deal saw BP add two directors to the board but the senior management team remain in place and do what they do best. The early signs are that this will go better than BP’s first venture into solar.
During this flurry of well-structured activity, Exxon remained conspicuous by its absence and has continued to draw the ire of environmental campaigners and renewable advocates alike. After a protracted battle with activist shareholders, the company eventually agreed to shift its stance on how it reported its exposure to climate change risks.
The irony of Exxon’s 500MW renewable energy procurement being used directly to extract Texan oil reserves will not be lost on its critics.