Oil companies starting to invest more in green solutions

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Words: Matthew Hansen
27 Jan 2021

Overnight, Dutch oil firm Shell confirmed that it’s buying a full 100 per cent stake in charging company Ubitricity.

The German-based start-up specialises in building EV car chargers from lamp posts and has a 13 per cent market share of charging points in the UK, a greater market share than any other charging firm. The full price Shell is paying for Ubitricity has not been disclosed.

The move is the latest sign of a traditional ‘big oil’ company pivoting its business in preparation of an electrified future; one that’s unlikely to see these companies rake in oil-based revenue like they have done in the past.

While the news is being heralded by some as a turning point for oil companies as we know them, plenty of oil firms are already in the process of dabbling with electrification. Shell themselves have already installed 1000 charging stations at 430 of its petrol stations around the world.

Shell, Total, BP, Eni, and Equinor are the oil firms best known for their investment in next-generation technologies and electrification. Equinor has invested a small amount into wind turbines, and two years ago BP acquired Chargemaster — at the time the UK’s largest EV charging network — to name two examples.

Those expecting the acquisition to ‘open the floodgates’ on European charging network development will most likely have to wait. While BP and Shell now have a clear grip on the UK’s charging network, both will be earmarking 2030 (when the UK brings in its ban on ICE vehicles) as a potential boom period.

Add to this, too, the fact that electric vehicles account for less than one per cent of the vehicles on the UK’s roads. Local demand for them is growing somewhat, with over 10 per cent of 2020 vehicle sales being electrified. But, it’s going to be quite some time before they become the dominant.

The impacts of the Covid-19 pandemic could also be causing oil companies to diversify. At the virus’ early peak in April it was predicted that the oil industry could lose as much as US$1trillion. Shell declared the following July that it had lost US$18.3billion. By the end of the year, Shell and Total had confirmed a combined loss of US$25billion.

Curiously, it’s been widely noted that the pandemic had less impact on sales of electrified vehicles around the world, with some manufacturers noting that they had actually seen an increase in green vehicle sales over the tumultuous period.

 

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