The resistance to renewables

Several energy providers have backtracked on their sustainability commitments, cutting investments in renewable projects. But why are energy providers turning their backs on these objectives?

Profit vs planet

Currently, renewable energy projects such as wind and solar are simply not returning as much profit for oil and gas companies as fossil fuels. According to 2023 figures from NPR, US companies producing oil and gas could expect to make a return of between 20 – 50% return on investment on the capital invested into projects. For solar and wind projects, the estimated figure stands at just 5 – 10%.

Consequently, there is less investor interest in the stocks of oil companies that are diverting their budgets towards wind and solar. The five year period between the end of 2019 and the end of 2024 saw the stock price of companies that did not invest in wind and solar energy grow by over 70%, compared to smaller growth (and in some instances a decrease in stock price) for companies that did invest in renewables.

There are a few major barriers to profitability. The first is that oil companies may lack the sector-specific experience required in order to succeed with wind and solar projects.

A second factor affecting profitability is the high initial investment costs for renewable projects combined with the low prices of solar and wind power. This means that it takes years, or even decades, for investors to see return on investment.

Improving infrastructure

While these energy sources have become less expensive to generate in recent years, they tend to produce energy during the same time periods. For instance, on a particularly windy day, the wind energy produced will outstrip demand, which drives down prices. Additionally, wind turbines are increasingly being turned off as the grid is unable to cope with this surplus.

One solution to this issue is using interconnectors, high-voltage direct current (HVDC) cables that connect the energy grids of different countries, enabling the movement of renewable energy to international markets where demand is higher. HVDC technology is ideal for long-distance transmission with minimal energy losses.

In HVDC systems, resistor technology plays a vital safety role by dissipating excess wind energy during faults, helping to stabilise the grid and prevent damage. DC neutral earthing resistors also add a further layer of protection to HVDC converter transformers, both offshore and onshore, by managing fault currents and ensuring system reliability.

Ultimately, privately owned oil and gas companies are more likely to be driven by shareholder interests than they are by environmental targets. However, by ensuring that the correct infrastructure is in place to make the most from the renewable resources, it is possible to improve both sustainability and profitability.

For more news and technical articles from the global renewable industry, read the latest issue of Energy Global magazine.

Energy Global's Summer 2025 issue

Dive into the latest renewable energy insights in the Summer issue of Energy Global, out now! This edition features a guest comment from Change Rebellion on the role real change management can play in the global energy sector before a regional report, which looks at energy trends and transformations across the Americas. Other key topics are also explored, including offshore support vessels, floating wind, weather analysis, and battery storage. Contributors include Ørsted, CRC Evans, Miros, Solcast, and more, so don’t miss out!

Read the article online at: https://www.energyglobal.com/special-reports/20082025/the-resistance-to-renewables/